Southern  Branch 

f"  of  the 

University  of  California 

Los  Angeles 

Form  L  I 

771 


TV,;,  h^nU   is  Dl'P  '^"  the  last  date  stamped  below 


PROPERTY  AND  CONTRACT  IN  THEIR  RELATIONS 
TO  THE  DISTRIBUTION  OF  WEALTH 


THE  MACMILLAN  COMPANY 

HEW  VORK  •  BOSTON  •  CHICAGO  •  DALLAS 
ATLANTA  •  SAN  FRANCISCO 

MACMILLAN  &  CO.,  Limited 

LONDON   •   BOMBAY   •  CALCUTTA 
MELBOURNE 

THE  MACMILLAN  CO.  OF  CANADA.  Ltd. 

TORONTO 


1^ 

PROPERTY  AND  CONTRACT 


IN  THEIR  RELATIONS  TO  THE 


DISTRIBUTION  OF  WEALTH 


BY 

RICHARD  T.  ELY,  Ph.  D.,  LL.  D. 

PROFESSOR  OF  POLITICAL  ECONOMY  IN  THE  UNIVERSITY  OF  WISCONSIN 


VOL.  I 


N:pm  fork 

THE  MACMILLAN   COMPANY 

1914 

All  rights  reserved 


COPTBIOHT,    1914 

By  the  MACMILLAN  COMPANY 
Set  up  and  electrotyped.     Published  October,  1914. 


0»  Q  Q  (') 


zy 


nni 


THIS  BOOK  IS  DEDICATED  TO  THE 

STUDENTS  OF  MY  CLASSES  IN 

THE  DISTRIBUTION  OF  WEALTH 

UNIVERSITY  OF  WISCONSIN,  1892-1914 

FRIENDS,  WHOSE  CHALLENGE  AND  CRITICISM 

HAVE  AIDED  IN  SHAPING  IT 


PREFACE 

It  is  the  privilege  of  an  author  in  his  Preface  to  drop 
the  third  person  and  to  speak  directly  in  the  first  person 
to  those  who  may  be  interested  in  the  genesis  of  his 
book  and  in  the  circumstances  surrounding  its  prepara- 
tion as  well  as  in  any  other  matters  which  he  cares  to 
state  in  explanation  of  his  undertaking.  Generally  he 
has  in  mind  in  his  Preface  that  part  of  the  general 
public  who  may  be  curious,  scientifically  or  otherwise, 
about  books  in  his  particular  field  and  also,  and  more 
especially,  a  narrower  group  of  colleagues  and  friends 
to  whom  he  desires  to  make  clearer  than  would  be  ap- 
propriate in  the  text  of  his  book  his  intentions,  the  ob- 
stacles that  he  may  have  encountered,  and  the  relation 
of  the  work  in  question  to  other  plans.  I  gladly  avail 
myself  of  this  privilege  to  speak  to  those  who  may  care 
to  hear  what  I  have  to  say  about  my  Property  and  Con- 
tract in  their  Relations  to  the  Distribution  of  Wealth;  and 
this  circle  includes  before  all  others  my  own  students,  to 
whom  I  have  been  lecturing  on  these  topics  during  the 
past  twenty  years.  And  I  am  moved  at  once  to  express 
my  gratitude  to  them  for  the  stimulus  which  I  have  re- 
ceived from  my  contact  with  them.  We  have  truly 
worked  together  in  the  preparation  of  this  work  as  it 
has  grown  from  year  to  year,  and  the  hours  I  have 
spent  in  the  class  room  with  them  have  been  among  the 


viii  PREFACE 

happiest  of  my  life.  Now  those  who  have  left  Wiscon- 
sin are  widely  scattered  and  many  are  occupying  dis- 
tinguished positions  in  our  American  universities  and  in 
our  public  life;  and  their  loyal  attachment  is  one  of  my 
dearest  possessions.  To  them  I  dedicate  my  book  be- 
cause it  belongs  to  them  first  of  all. 

The  lectures  on  Property  and  Contract  were  written 
more  than  ten  years  ago  and  as  early  as  1899  many 
parts  of  the  book  were  substantially  in  their  present 
form.  The  work  of  revision  has  consisted  to  no  incon- 
siderable extent  in  removing  more  recent  additions. 
One  great  part  of  the  lectures,  namely,  that  on  Landed 
Property,  has  been  cut  out  and  reserved  for  treatment 
in  subsequent  volumes,  namely,  those  on  Landed  Prop- 
erty and  the  Rent  of  Land.  In  some  places  I  am  obliged 
to  refer  to  this  forthcoming  work  in  order  to  explain  a 
lack  of  treatment  of  topics  which  otherwise  would  be 
expected. 

Some  of  my  students  have  felt  that  it  might  have 
been  better  had  I  published  this  work  as  early  as  1900, 
stating  that  had  I  done  this  the  contributions  which 
they  are  kind  enough  to  think  I  have  made  would  have 
stood  out  more  clearly  than  now,  when  through  them 
and  others  they  have  become  widely  diffused.  Several 
have  given  courses  covering  this  same  field,  using  the 
lecture  notes  they  have  taken  in  my  classes  as  a  basis; 
and  have  done  so  with  my  cordial  assent  and  approval. 
And  then  through  these  students  and  others  the  ideas 
and  in  some  cases  the  very  words  in  which  they  have 
been  expressed  have  become  widely  diffused  in  class 
room  work  and  publications  growing  out  of  class  room 


PREFACE  ix 

work.  But  this  matter  of  credit  is  one  that  has  com- 
paratively Uttle  interest  for  the  great  world,  and  fre- 
quently we  do  not  know  ourselves  the  source  of  our  own 
ideas.  We  go  back  to  our  teachers,  I  to  Conrad,  Wagner 
and  above  all  Knies;  and  they  to  their  teachers,  and  so 
we  have  a  stream  of  thought,  and  each  scholar  hopes 
to  contribute  something  to  it;  how  much  he  does  contri- 
bute it  is  hard  for  him  and  his  contemporaries  to  say. 

The  delay  has  been  in  my  case  occasioned  in  large  part 
by  the  multiplicity  of  demands  made  on  my  time  by  the 
rapidly  growing  Department  of  Political  Economy  in 
the  University  of  Wisconsin.  The  connections  of  the 
Department  have  constantly  increased  and  the  close 
relations  with  the  State  in  our  effort  to  render  pubUc 
service  have  been  the  cause  of  many  demands  on  time 
and  strength.  I  have  taken  some  personal  satisfaction 
in  finding  myself  not  a  worse  sinner  in  this  respect  than 
all  those  upon  whom  the  Tower  of  Siloam  fell,  for  the 
prefaces  to  the  books  of  Professor  Wagner  of  Germany 
and  Professor  Marshall  of  England  tell  the  same  story 
of  long-deferred  hopes  of  publication. 

During  the  years  of  growth  of  this  work  I  have  been 
struck  by  the  orderly  nature  and  continuity  of  progress 
and  also  by  the  internationalism  of  law  and  institu- 
tions, corresponding  to  economic  internationalism.  The 
growth  from  1892  to  1914  has  been  rapid,  but  it  shows 
no  marked  breaks.  Citations  and  quotations  in  1895, 
1896,  etc.,  are  as  appropriate  as  those  of  1912  and  1913. 
They  need  continuation  but  usually  not  striking  out. 
And  very  markedly  does  the  evolution  of  this  book  or 
— to  speak  with  greater  accuracy — the  evolution  of  my 


X  PREFACE 

ideas  embodied  in  it  illustrate  the  internationalism  of 
our  thought  and  life,  showing  the  inadequacy  of  the 
idea  that  law  is  local  and  that  we  do  not  need  to  study- 
foreign  systems  of  law.  My  own  serious  study  of  eco- 
nomics began  in  Germany  but  was  continued  in  this 
country;  and  built  up  on  American  experience  and  fed 
by  it.  My  ideas  are  the  outgrowth  of  American  life; 
yet  applicable  again  in  many  particulars  to  conditions  in 
Germany,  England  and  other  European  countries.  The 
German  economists  are  regarded  as  progressive  and 
our  American  courts  as  conservative;  but  I  have  found 
no  difficulty  in  passing  from  German  economic  litera- 
ture to  the  decisions  of  American  courts.  Each  land 
shows  continuity  of  thought  and  the  similarity  of  ideals 
is  here  striking  for  frequently  the  decisions  are  as  pro- 
gressive as  modern  economic  thought. 

One  of  the  difficulties  has  been  compression.  Chapter 
after  chapter  of  this  book  could  be  expanded  into  a 
good-sized  volume — many  of  them  will  be  so  expanded 
by  others.  The  Socialisation  of  Property  and  the  Regu- 
lation of  Inheritance  of  Property  serve  merely  as  illus- 
tration. A  large  part  of  economics  is  covered  from  our 
point  of  view,  while  in  law  we  consider  police  power, 
eminent  domain,  constitutional  law,  and,  of  course,  con- 
tract and  property  and  general  jurisprudence.  One  of 
the  hardest  and  indeed  most  painful  things  I  have  had  to 
do  is  to  make  omissions  of  things  I  wanted  to  say  in 
order  to  bring  the  book  within  reasonable  compass — 
cutting  out  passages  and  discussions  dear  to  my  heart; 
perhaps  only  authors  will  fully  understand  this. 

A  temptation  has  been  found  in  the  fascination  of  the 


PREFACE  xi 

study  of  purely  legal  questions  and  especially  of  deci- 
sions to  drift  away  from  the  economic  point  of  view;  but 
I  have  endeavoured  to  resist  this  temptation  and  ''to 
stick  to  my  last. "  I  trust  I  have  succeeded.  Dr.  Orth, 
to  whom  I  am  indebted  for  much  valuable  assistance, 
wrote  me  some  time  ago  as  follows:  ''Now  you  must 
avoid  making  your  book  a  law  book  and  must  not  make 
it  appear  that  you  are  basing  your  opinions  or  your 
conclusions  only  on  law  cases.  Your  contribution  is  the 
philosophy  that  has  been  evolved  in  spite  of  the  courts." 

The  division  of  the  field  has  occasioned  trouble; 
especially  as  the  subjects  are  so  interwoven.  The 
treatment  of  property  presupposes  contract  and  con- 
tract, property;  and  vested  rights,  as  they  are  developed, 
are  based  on  both.  These  divisions  do  give  us  points  of 
view,  and  are  in  reality  distinct  but  not  mutually  ex- 
clusive economic  and  legal  categories.  The  merging  of 
them  in  the  United  States  is  largely  due  to  the  exigen- 
cies imposed  on  us  by  our  constitutional  system;  for 
example,  the  courts,  having  the  duty  of  protecting 
property,  make  contract  a  property  right.  Science, 
however,  should  emphasise  fine  and  carefully  drawn 
distinctions. 

The  order  in  which  topics  are  taken  is  determined  by 
the  economic  rather  than  the  legal  content  of  the  work. 
In  a  law  book,  police  power,  for  example,  would  be 
treated  naturally  in  a  systematic  way  by  itself,  but  the 
economic  order  brings  us  back  to  the  police  power  again 
and  again.  It  is  necessary  to  make  a  choice  between 
the  two  orders  of  treatment  and  this  explains  the  scat- 
tered discussion  of  legal  topics  which  is  puzzling,  unless 


xii  PREFACE 

it  is  borne  in  mind  that  this  is  first  of  all  an  economic 
work. 

It  has  not  been  attempted  to  present  anything  like  full 
bibhographies.  It  would  be  easy  to  fill  a  large  volume 
with  lists  of  books,  for  the  fields  covered  are  many  and 
large.  Even  without  an  attempt  at  a  full  bibhography, 
titles  could  have  been  multiplied  with  ease.  I  do  not 
believe  that  any  useful  purpose  is  accomplished  by  such 
multiplication.  .  Books  and  articles  are  referred  to  for 
some  special  reason,  as  sources,  as  authority,  and  as 
affording  information  which  some  class  of  readers  may 
care  to  have.  The  notes  and  cases  have  afforded  a 
puzzling  problem  on  account  of  the  various  classes  of 
readers  who,  I  venture  to  hope,  will  be  interested  in  my 
work.  I  have  finally  decided  to  put  the  notes  and  cases 
by  themselves  at  the  close  of  the  chapters  where  they 
can  easily  be  consulted  by  students  and  others  who  care 
to  go  beyond  the  main  text,  with  which  many  will  be 
content.  Those  who  use  the  book  in  class  work  will 
naturally  wish  to  refer  frequently  to  the  notes  and  will 
often  assign  them  as  part  of  the  required  work. 

I  have  tried  to  give  credit  where  it  is  due.  My  mas- 
ter, the  late  Carl  Knies  of  Heidelberg,  is  perhaps  the  one 
to  whom  I  owe  most,  but  my  inspiration  and  instruction 
I  have  found  largely  in  his  lectures  to  which  I  have 
listened.  Later  I  came  under  the  influence  of  Pro- 
fessor Adolf  Wagner,  of  the  University  of  Berlin,  and  to 
him  I  refer  more  frequently  than  to  Knies,  one  reason 
being  that  my  indebtedness  to  Wagner  is  to  his  books 
more  than  to  his  lectures.  It  is  difficult  to  place  and 
apportion  credit  and  when  a  book  has  grown  as  this  has 


PREFACE  xui 

done,  one  may  have  forgotten  various  sources  of  sug- 
gestions and  ideas.  Even  classifications  may  in  some 
cases  linger  in  the  memory  after  their  authors  have  been 
forgotten.  I  have  traced  various  ideas  in  the  writings 
of  others  unmistakably  to  lectures  to  which  I  hstened  in 
Heidelberg,  in  cases  where  even  the  authors  had  so  ab- 
sorbed them  and  made  them  theirs  as  to  forget  the 
source.  Of  some  things  in  the  book,  one  or  another  may 
say,  ''Oh!  this  is  mine,"  forgetting  that  they  too  go  back 
to  Knies.  I  can  then  only  say  I  have  conscientiously 
tried  to  give  all  credit  to  others  to  which  they  are  en- 
titled. From  numberless  sources  and  especially  from 
American  fife,  I  have  gathered  the  ideas  and  information 
which  I  have  elaborated. 

I  must  especially  thank  various  authors  and  authori- 
ties to  whom  I  am  indebted — not  with  an  idea  of  making 
them  responsible  for  my  opinions,  but  because  to  them 
much  is  due  for  any  excellence  my  work  may  possess. 
First  of  all,  I  mention  Mr.  Justice  Oliver  Wendell 
Holmes,  of  the  Supreme  Court  of  the  United  States, 
who  has  read  the  work  in  manuscript  and  given  many 
valuable  suggestions.  The  greater  part  of  the  manu- 
script has  also  been  read  by  Dr.  Samuel  P.  Orth,  pro- 
fessor of  political  science  in  Cornell  University;  Pro- 
fessor Allyn  A.  Young,  of  Cornell  University;  Professor 
Lewis  H.  Haney,  of  the  University  of  Texas;  Mr. 
Justice  A.  A.  Bruce,  of  the  Supreme  Court  of  North 
Dakota;  Dr.  Max  O.  Lorenz  and  Mr.  Fred  H.  Esch, 
both  of  the  Interstate  Commerce  Commission ;  Honour- 
able John  H.  Roemer,  Chairman  of  the  Wisconsin 
Railroad  Commission ;  and  Dr.  W.  I.  King,  instructor  in 


xiv  PREFACE 

political  economy,  of  the  University  of  Wisconsin.  I  feel 
grateful  to  all  for  valuable  assistance.  To  Dr.  Orth, 
I  am  indebted  for  the  appendix  in  which  cases  on  Prop- 
erty and  Contract  are  presented  chronologically  with 
brief  comment  to  show  the  evolution  of  the  law.  Dr. 
Orth  has  also  looked  up  many  cases  in  the  notes  and 
in  several  places  I  use  his  notes  unchanged  over  his 
initials.  To  Dr.  W.  I.  King,  I  am  indebted  for  the 
appendix  printed  over  his  name  giving  the  limitations 
on  distribution  in  production,  which  I  believe  to  be  a 
valuable  contribution  to  our  economic  literature;  also 
for  data  and  suggestions  elsewhere  used. 

Professor  Henry  Schofield,  of  the  Northwestern 
University  Law  School,  Professor  H.  W.  Ballantine,  and 
Professor  E.  A.  Gilmore,  both  of  the  Law  School  of  the 
University  of  Wisconsin,  have  been  most  kind  in  answer- 
ing questions  and  in  the  discussion  of  numerous  points. 
Professor  Freund,  of  the  University  of  Chicago,  Dean 
Wigmore,  of  the  Northwestern  University  Law  School, 
and  Professor  Kirchwey,  of  the  Law  School  of  Columbia 
University,  have  placed  me  under  obligation  for  letters 
answering  specific  questions.  But  no  one  of  these  or 
other  friends  must  be  held  to  any  responsibility  for  the 
views  I  express.  Professor  Ludwig  Sinzheimer,  of  the 
University  of  Munich,  during  1913  acting  professor  in 
the  University  of  Wisconsin,  has  also  aided  me  with 
points  in  regard  to  German  law  and  institutions. 

Among  the  many  others  who  have  contributed  in- 
formation here  and  there  I  desire  to  mention  Mr.  Jus- 
tice Henry  D.  Harlan,  of  the  Supreme  Bench  of  Balti- 
more City;  Mr.  Justice  E.  Ray  Stevens,  of  Wisconsin; 


PREFACE  XV 

Honourable  B.  Howard  Haman,  of  Baltimore;  Dr.  Delos 
F.  Wilcox,  of  the  Public  Service  Commission,  of  New 
York  City;  Mr.  John  J.  Hannan,  Secretary  to  Senator 
La  Follette;  Mr.  E.  M.  Griffith,  State  Forester,  of  Wis- 
consin; Honourable  George  W.  Field,  of  Boston,  Chair- 
man, Commissioners  on  Fisheries  and  Game,  Massachu- 
setts; Honourable  Charles  C.  Yates,  Assistant,  United 
States  Coast  and  Geodetic  Survey,  Chief  of  Party, 
Baltimore,  Md.;  the  Canadian  officials  Honourable  A. 
Johnston,  Deputy  Minister  Marine  and  Fisheries,  of  the 
Dominion  of  Canada,  and  Honourable  Aubrey  White, 
Deputy  Minister  of  Lands  and  Forests,  of  the  Province 
of  Ontario;  and  Frau  Helene  Riechers,  of  Berlin,  Secre- 
tary of  the  Woman's  Committee  of  the  Association  of 
the  German  Theatrical  Profession. 

Mrs.  Caro  Bugbey  MacArthur,  of  Urbana,  Illinois, 
has  assisted  in  a  multitude  of  ways,  first  in  Munich,  then 
later  in  Madison  and  Chicago,  supervising  the  first 
copying  of  the  manuscript  and  looking  up  many  points 
for  me.  I  owe  much  to  her  and  for  similar  intelligent 
assistance  I  am  grateful  to  Miss  H.  Dora  Stecker,  to 
Miss  Dorothea  Cable,  Miss  Jean  M.  Douglas  and  Miss 
Alice  B.  Cronin.  Mr.  R.  T.  Zillmer,  one  of  my  graduate 
students,  and  also  instructor  in  pofitical  science,  de- 
serves my  thanks  for  help,  especially  with  respect  to  the 
cases  cited.  To  Miss  Bettina  Jackson,  I  am  indebted 
for  the  chief  part  of  the  labour  involved  in  the  prep- 
aration of  the  List  of  Authors  and  Works  Cited.  Also 
I  must  mention  the  valuable  assistance  in  the  prepara- 
tion of  the  Index  given  by  Miss  Louise  Phelps  Kellogg 
of  the  staff  of  the  Wisconsin  State  Historical  Society. 


XVI  PREFACE 

Finally  I  must  not  fail  to  thank  the  authorities  of  the 
University  of  London  for  the  invitation  to  give  a  brief 
course  of  lectures  on  property  and  its  relations  to  the 
distribution  of  wealth.  This  was  a  graduate  course  and 
was  dehvered  during  the  Summer  Term  of  the  university 
year  1913-14.  If  some  of  the  latest  additions  to  the 
book  have  value,  I  owe  it  in  no  small  degree  to  the  new 
and  stimulating  environment  which  I  found  in  London. 
It  was  there  that  I  developed  the  theory  of  the  police 
power  which  is  presented  in  this  book. 

Richard  T.  Ely. 

The  University  of  Wisconsin,  July,  1914. 


CONTENTS 

PAGE 

Preface vii 

Table  of  Cases xix 

INTRODUCTION 

Chapter     I.  Distribution  Defined  and  Described 1 

II.  The  Forces  in  Distribution 9 

III.  Wealth  and  Its  Kinds.    Production  and  Distri- 

bution.    Statics  and  Dynamics  of  Distribu- 
tion       19 

IV.  The  Place  of  Distribution  in  a  System  of  Eco- 

nomics       40 


BOOK  I 

The  Fundamentals  in  the  Existing  Socio-Economic  Oeder, 
Treated  from  the  Staitopoint  of  Distribution 

PART  I.  PROPERTY,  PUBLIC  AND  PRIVATE 

Chapter  I.  Property,  Public  and  Private,  the  First 
Fundamental  Institution  in  the  Distribu- 
tion of  Wealth 51 

Appendix  to  Chapter  I.  The  Discussion  of 

Property  in  Economic  Literature 70 

II.  Illustrations    showing    the    Importance    of 

Property  in  Wealth  Distribution 79 

III.  Property  Defined  and  Described 94 

IV.  Property,  Possession,  Estate,  Resources.  ...   118" 
V.  The  Attributes  and  Characteristics  of  Prop- 
erty    132 

xvii 


xviii  CONTENTS 

PAGE 

Chapter        VI.  The  Social  Theory  of  Private  Property:  or, 

Private  Property  a  Social  Trust 165 

VII.  Property  and  the  Police  Power 200 

VIII.  What  May  I  Own? 237 

IX.  The    Conservative    Nature    of    the    Social 

Theory  of  Property 248 

X.  A  Discussion  of  the  Kinds  of  Property 263 

XI.  A   Discussion   of   the   Kinds   of   Property 

(Concluded) 273 

XII.  The  General  Grounds  for  the  Maintenance 

of  Private  Property 295 

XIII.  A  Critical  Examination  of  the  General 
Grounds  for  the  Maintenance  of  Private 

Property 307 

XTV.  The  Present  and  Future  Development  of 

Private  Property 340 

XV.  The  Present  and  Future  Development  of 
Private  Property  (Continued):  The  Ex- 
tension of  Private  Property  along  Certain 
Lines  and   the   Development  of   Rights 

Akin  to  Private  Property 361 

XVI.  The  Present  and  Future  Development  of 
Private  Property  (Continued):  Modifica- 
tions in  the  Modes  of  Acquisition  of  Pri- 
vate Property  in  General.     EquaUty  of 

Opportunity.    Surplus  Value 388 

XVII.  The  Present  and  Future  Development  of 
Private  Property  (Continued) :  The  Regu- 
lation of  Inheritance 415 

XVIII.  The  Present  and  Future  Development  of 
Private  Property  (Continued):  The 
Fluidity  of  Property 451 


TABLE  OF  CASES 

A 

PAGE 

Adair  v.  U.  S.,  208  U.  S.  161  (1908) 620 

Adams  v.  Boston  H.  &  E.  E.  R.  R.  (Mass.),  1  Fed.  Cases, 

No.  47  (1870) 164 

Adams  v.  Bullock  &  Co.,  47  S.  0.  (Miss.)  527  (1908) 858 

Addyston  Pipe  &  Steel  Co.  v.  U.  S.,  175  U.  S.  211  (1899) 881 

Adirondack  Ry.  Co.  v.  People,  175  U.  S.  335  (1899) 881 

Ala.  &  V.  Ry.  Co.  v.  King,  93  Miss.  379;  47  So.  857  (1908). . .  874 

Alexander  v.  Gordon,  101  Fed.  91  (1900) 869 

Alger's  Case,  7  Cush.  (Mass.)  53  (1851).  See  Commonwealth  v. 

Alger. 

Alleghany  Base  Ball  Club  v.  Bennett,  14  Fed.  257  (1882) 742 

AUerton  v.  N.  Y.  L.  &  W.  Ry.  Co.,  199  N.  Y.  489;  93  N.  E. 

270  (1910) 856 

Allis  Chalmers  Co.  v.  Iron  M.  Union,  150  Fed.  155  (1906) 883 

Allnut  V.  Inglis,  12  East.  527  (1810) 259 

Amer.  Base  B.  &  Ath.  Exch.  Co.  v.  Harper,  54  Gent.  L.  J.  449 

(1902),  (Mo.) 742 

American  Federation  of  Labor  v.  Bucks  Stove  Range  Co.,  33 

App.  D.  C.  83  (1909) 884 

American  Pt.  Wks.  v.  Lawrence,  23  N.  J.  L.  9  (1850) 874 

American  Steel  &  Wire  Co.  v.  Wire  D.  &  D.  M.  Union,  90  Fed. 

598  (1898) 883 

Arapahoe  Co.  v.  Rocky  M.  N.  Ptg.  Co.,  15  Colo.  App.  189 

(1900) 856 

Arkansas  Stove  Co.  v.  State,  94  Ark.  27;  125  S.  W.  100  (1910) .   871 

Armour  Packing  Co.  v.  Snyder,  84  Fed.  136  (1897) 870 

Arnot  V.  Coal  Co.,  68  N.  Y.  558  (1877) 880 

Arrowsmith  v.  Harmoning,  118  U.  S.  194  (1886) 868 

Arthur  v.  Oaks,  63  Fed.  310  (1894) 882 

Assurance  Co.  v.  Knott,  10  Chancery  App.  142  (1874) 882 

Atchison,  T.  &  S.  F.  Ry.  Co.  v.  Gee,  139  Fed.  582  (1905) 883 

Atchison,  Topeka  &  S.  F.  Ry.  v.  U.  S.,  93  U.  S.  442  (1876) ....  164 

xix 


XX  TABLE  OF  CASES 

PAGE 

Atlantic  Coast  Line  Ry.  v.  North  Gov.  Corp.  Comm.,  206  U.  S, 

1  (1907) 879 

Atlantic  Coast  Line  Ry.  Co.  v.  Riverside  Mills,  219  U.  S.  186 

(1911) 879 

Atlantic  Coast  Line  Ry.  v.  State,  69  S.  E.  (Ga.)  725  (1910) ...   879 

Atty.  Gen.  v.  C.  &  N.  W.  R.  R.,  35  Wis.  425  (1874) 705,  863 

Atty.  Gen.  v.  Williams,  174  Mass.  476  (1899) 232 

Austin  V.  State,  10  Mo.  591  (1847) 870 

Ayers  v.  Lawrence,  59  N.  Y.  192  (1874) 856 

B 

Backus  V.  Ft.  St.  Union  Depot  Co.,  169  U.  S.  557  (1898) 865 

Bacon  v.  Walker,  204  U.  S.  311,  317,  318  (1907) 219 

Baldwin  v.  Smith,  82  111.  162  (1876) 867 

BaUard  v.  Hunter,  204  U.  S.  241  (1907) 865 

B.  &  O.  R.  R.  Co.  V.  Int.  St.  Com.  Commission,  215  U.  S.  216 

(1909) 879 

B.  &  O.  Ry.  Co.  V.  Tripp,  175  111.  251  (1898) 878 

B.  &  O.  R.  R.  V.  U.  S.,  220  U.  S.  94  (1911) 877 

Barber,  In  re,  39  Fed.  641  (1889) 870 

Barbier  v.  Connolly,  113  U.  S.  27  (1885) 650 

Barger  v.  Barringer,  151  N.  C.  433;  66  S.  E.  439  (1909) 856 

Barker  v.  State,  109  Ind.  58  (1886) 858 

Barnes  &  Co.  v.  C.  Typo.  Union,  232  lU.  424;  83  N.  E.  940 

(1908).    Affirmed,  134  111.  App.  20 883 

Barr  v.  Essex  Trade  Amalgamated  Typo.  Union,  53  N.  J.  Eq. 

101  (1894) 882 

Barr  v.  New  Brunswick,  67  Fed.  402  (1895) 868 

Barron  v.  Mayor  of  Baltimore,  7  Peters,  243  (1833) 867 

Bartemeyer  v.  Iowa,  18  Wall.  129  (1873) 873 

Bartlett  v.  St.  Ry.  Co.,  82  Mich.  658  (1890) 872 

Bassett  v.  Parsons,  140  Mass.  169  (1885) 860 

Bates  V.  Robinson,  8  la.  318  (1859) 856 

Beals  V.  The  State,  139  Wis.  544  (1909) 444,  445 

Beck  V.  Railway  Teamsters'  Union,  118  Mich.  497;  77  N.  W. 

13  (1898) 883 

Beebe  v.  State,  6  Ind.  501  (1855) 870 

Beechley  v.  Mulville,  102  la.  602  (1897) 880 


TABLE  OF  CASES  xxi 

PAGE 

Beer  Co.  v.  Mass.,  97  U.  S.  25  (1877) 876 

Bement  v.  Nat.  Harrow  Co.,  186  U.  S.  70  (1902) 880,  881 

Benz  et  aL  v.  Kremer  ei  al.  (Wis.),  125  N.  W.  99  (1910) 235 

Binghamton  Bridge  Case,  3  Wall.  51  (1865) 862,  876,  884 

Birdsell  v.  Twenty-third  St.  Ry.  Co.,  8  Dal.  (N.  Y.)  419  (1880) .  872 

BisseU  V.  Heath,  98  Mich.  472  (1894) 876 

Bittenhaus  v.  Johnson,  92  Wis.  588  (1896) 110,  875 

Black  V.  Elkhorn  Min.  Co.,  163  U.  S.  445  (1896) 859 

Black  V.  State,  113  Wis.  205  (1902) .419,  444 

Blake  v.  Winona  &  St.  P.  Ry.,  19  Minn.  418  (1872) 862,  863 

BlindeU  et  al  v.  Hagan  et  al,  54  Fed.  40  and  56  Fed.  696  (1893) .  882 

Block  V.  Chicago,  239  111.  251;  87  N.  E.  1011  (1909) 876 

Blundell  V.  Catterall,  5  Barn.  &  Aid.  268  (1821) 68 

Board  of  Trustees  v.  Atlanta,  113  Ga.  883  (1901).    See  Trustees 

V.  Atlanta. 
Bonaparte  v.  Camden  &  A.  R.  Co.,  3  Fed.  Cas.,  No.  1617  (N.  J., 

1830) 194 

Bonnett  v.  VaUier,  136  Wis.  193;  116  N.  W.  885  (1908) . . .  .235,  869 

Borden  v.  State,  11  Ark.  519,  44  Am.  Dec.  217  (1851) 66 

Borgnis  i;.Falk  Co.,  147  Wis. 327  (1911) ;  113  N.  W.  209. 661,  765,  873 

Bostick  V.  Sams,  95  Md.  400  (1902) 232 

Boston  Beer  Co.  v.  Mass.,  97  U.  S.  25  (1877) 862,  868 

Boston,  etc.,  Ry.  Co.  v.  Salem  Ry.  Co.,  2  Gray  (Mass.),  1 

(1854) 857 

Braceville  Coal  Co.  v.  People,  147  111.  66  (1893) 658,  871 

Bragg  V.  Gaynor,  85  Wis.  463  (1893) 860 

Brass  v.  N.  Dakota,  153  U.  S.  391  (1894) 259,  871,  885 

Brewster  v.  Miller,  101  Ky.  368  (1897) 259 

Bridge  Proprietors  v.  Hoboken,  1  Wall.  116  (1863) 863 

Brinner  v.  Rebman,  138  U.  S.  78  (1890) 870 

Bromberg  v.  McArdle,  55  So.  805  (1911) 859 

Brown  v.  Brown,  41  N.  Y.  513  (1869) 859 

Bruch  V.  Carter,  32  N.  J.  L.  561  (1867) 856 

Budd  V.  N.  Y.,  143  U.  S.  517  (1892) 884 

Butchers,  etc.,  Co.  v.  Crescent  City,  etc.,  Co.,  Ill  U.  S.  746 

(1883) 876 

Butler  V.  Atty.  Gen.  (Mass.),  80  N.  E.  688  and  8  L.  R.  A.  (N.  S.) 

1047  (1907) 68 


xxii  TABLE  OF  CASES 

PAGE 

Butterick  Pub.  Co.  v.  Typographical  Union,  100  N.  Y.  S.  292 

(1906) 883 

Byars  v.  State,  102  Pac.  (Okla.)  804  (1909) 872 

C 

Cairo,  etc.,  R.  R.  Co.  v.  People,  92  111.  97;  34  Am.  Rep.  12 

(1879) 877 

Calder  v.  Bull,  3  Ball.  386  (1798) 856 

Callam  v.  Wilson,  127  U.  S.  540  (1887) 882 

Calumet  Service  Co.  v.  Chilton,  135  N.  W.  (Wis.)  131  (1912). .  705 
Camden  &  A.  R.  R.  Co.  v.  Briggs,  22  N.  J.  L.  623  (1850) ....  863 

Campbell,  Estate  of,  143  Cal.  623  (1904) 445 

Campbell  v.  Holt,  115  U.  S.  620  (1885) 868 

Canada  Railway  v.  International  Bridge  Co.,  8  App.   Cas. 

(1883) 723,  259 

Capital  C.  L.  &  F.  Co.  v.  Tallahassee,  186  U.  S.  401  (1902) ....  863 

Carlton  v.  Carlton,  72  Me.  116;  39  Am.  Rep.  307  (1881) 858 

Carson  v.  Brockton  Sewage  Co.,  182  U.  S.  398  (1900) 865 

Carthage  v.  Frederick,  122  N.  Y.  268;  25  N.  E.  480  (1890) ....  867 

Casey  v.  Typographical  Union,  45  Fed.  135  (1891) 882 

Central,  In  re,  Irrig.  Dist.,  117  Cal.  382  (1897) 875 

Cent.  R.  R.  of  Ga.  v.  R.  R.  Commrs.  of  Ala.,  161  Fed.  925 

(1908) 878 

Chambe  v.  Judge  of  Probate,  100  Mich.  112  (1894) 445 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters,  420  (1837) 

194,  863,  884 

Charlotte  C.  &  A.  Ry.  v.  Gibbes,  142  U.  S.  382  (1892) 877 

Chesapeake  &  Oliio  Fuel  Co.  v.  U.  S.,  115  Fed.  610  (1902) 881 

Chicago  V.  Netcher,  55  N.  E.  (111.)  707  (1899) 880 

C,  B.  &  Q.  R.  R.  V.  Chicago,  166  U.  S.  226  (1896) 862,  865 

C,  B.  &  Q.  R.  R.  Co.  V.  111.  ex  rel.  Drainage  Commissioners,  200 

U.  S.  561  (1906) 219,  866 

C,  B.  &  Q.  R.  R.  V.  Iowa,  94  U.  S.  155  (1876) 863,  878,  885 

C,  B.  &  Q.  R.  R.  V.  Neb.,  170  U.  S.  57  (1898) 862,  876 

C,  B.  &  Q.  Ry.  Co.  v.  U.  S.,  220  U.  S.  559  (1911) 879 

C,  I.  &  L.  Ry.  Co.  V.  Ry.  Commis.,  173  Ind.  469;  90  N.  E.  1011 

(1910) 879 

C,  M.  &  St.  P.  Ry.  Co.  V.  Westby,  178  Fed.  619  (1910) 873 


TABLE  OF  CASES  xxiii 

PAGE 

Chicago,  etc.,  Ry.  Co.  v.  Cicero,  154  111.  656;  39  N.  E.  574 

(1895) 856 

Chi.,  Rock  Isl.  &  Pac.  Ry.  Co.  v.  State,  86  Ark.  412  (1908)  and 

219  U.  S.  453  (1911) 878 

Child  V.  Coffin,  17  Mass.  64  (1820) 876 

Cincinnati  v.  Hafer,  49  Ohio  St.  60  (1892) 860 

Cincinnati  v.  Steinkamp,  54  Ohio  St.  284  (1896) 874 

Cincinnati,  H.  &  D.  R.  R.  Co.  v.  McKeen,  64  Fed.  36  (1894) ...  862 
C.  &  W.  Ry.  V.  City  of  Connersville,  218  U.  S.  336  (1910).  866 

Citizens  St.  R.  Co.  v.  City  Ry.  Co.,  56  Fed.  746  (1893) 862 

City  of  N.  Y.  V.  Cons.  Gas  Co.,  212  U.  S.  19  (1909) 858 

City  Ry.  Co.  v.  Citizens  W.  Ry.  Co.,  166  U.  S.  557  (1897) 863 

City  of  Tampa  v.  Waterworks  Co.,  34  South.  631  (1903) 259 

Claffey  v.  Chicago,  D.  &  C.  Co.,  249  111.  210;  94  N.  E.  551 

(1911) -. 874 

Clark  V.  Mitchell,  99  Mo.  627  (1879) 865 

Clark  V.  Nash,  198  U.  S.  361  (1905) 511,  514 

Clarke  v.  Smith,  49  Md.  106  (1878) 472 

Cleveland  Gas  L.  &  C.  Co.  v.  City  of  Cleveland,  71  Fed.  610 

(1896) 864,  877 

Cochran  v.  Preston,  108  Md.  220  (1908) 196,  232 

Goeur  d'Alene  Con.  Min.  Co.  v.  Miners  Union,  51  Fed.  260 

(1892) 882 

Collard  v.  Marshall,  1  Ch.  571  (1892) 882 

Commeyer  v.  Newton,  94  U.  S.  225  (1876) 860 

Commonwealth  v.  Alger,  Supr.  Jud.  Ct.  of  Mass.,  7  Cush.  53 

(1851) 68,  228,  234,  869 

Commonwealth  v.  Beatty,  15  Pa.  Super.  Ct.  5  (1897)  639 

Commonwealth  v.  Brown,  8  Pa.  Super.  Ct.  339  (1897) 658 

Commonwealth  v.  Chace,  9  Pick.  (Mass.)  15  (1829) 112,  381 

Commonwealth  v.  Clark,  3  Penn.  Sup.  Ct.  141  (1896) 381 

Commonwealth  v.  Farmers  &  Mechan.  Bank,  38  Mass.  542 

(1839) 876 

Commonwealth  v.  Gage,  114  Mass.  328  (1873) 871 

Commonwealth  v.  Hamilton  Mfg.  Co.,  120  Mass.  383  (1876) 

657,  872 
Commonwealth  v.  International  Harvester  Co.,   115  S.  W. 

(Kent.),  703  (1909) 880 


xxiv  TABLE  OF  CASES 

PAGE 

Commonwealth  v.  Tsenberg,  4  Pa.  Dist.  579  (1895) 658 

Commonwealth  v.  New  Bedford  Bridge  Co.,  68  Mass.  339  (1854)  864 
Commonwealth  v.  Perry,  155  Mass.  117  (1891).  67,  639,  658,  660,  872 

Commonwealth  v.  Potomska  Mills,  155  Mass.  122  (1891) 658 

Commonwealth  v.  Tewksbury,  11  Metcalf  (Mass.),  55  (1846). 

193,  229,  511 

Conn.  Mut.  Life  I.  Co.  v.  Stimson,  62  lU.  App.  319  (1896). ...  858 

Considine,  In  re,  83  Fed.  157  (1897) 870 

Consolidated  Gas  Co.  v.  Mayer,  146  Fed.  150  (1906) 877 

ConsoHdated  Gas  Co.  v.  N.  Y.,  157  Fed.  849  (1907) 234,  858 

Consolidated  Steel,  etc.,  Co.  v.  Murray,  80  Fed.  811  (1897). .  883 

Cotting  V.  Kansas  Stockyards  Co.,  79  Fed.  679  (1897) 871 

Covington  v.  Kent,  173  U.  S.  231  (1899) 863 

Coyle  V.  Gray,  30  Atl.  728  (1884) 116 

Craft  V.  McConoughy,  79  111.  346  (1875) 880 

Crescent  Feather  Co.  v.  Union,  95  Pac.  (Cal.)  871  (1908) 883 

Crowly  V.  Ellsworth,  114  La.  308;  38  So.  199  (1905) 874 

Curry  v.  Spencer,  61  N.  H.  624  (1892) 874 

D 

Danforth  v.  Groton  Water  Co.,  178  Mass.  472  (1901) 870 

Daniels  v.  Hilgard,  77  111.  640  (1875) 873 

Dark  V.  Johnson,  55  Pa.  St.  164  (1867) 113 

Dartmouth  College  v.  Woodward,  4  Wheat.  518  (1819) .  862,  876,  884 

Davidson  v.  New  Orleans,  96  U.  S.  97  (1877) 865 

Davis  V.  Mills,  194  U.  S.  451  (1904) 708 

Davis  V.  St.  Louis  Co.  Commrs.,  65  Minn.  310;  67  N.  W.  997 

(1896) 868 

Davis  V.  Zimmerman,  36  N.  Y.  Supp.  303  (1895) 882 

Dayton  Coal  Co.  v.  Barton,  183  U.  S.  23,  22  Sup.  Ct.  5  (1901).  260 

Debs,  In  re,  158  U.  S.  564  (1895) 881,  882 

Delano,  In  re,  176  N.  Y.  486  (1903) 446 

Delassus  v.  U.  S.,  9  Peters,  117  (1835) 859 

Delaware,  L.  &  W.  Ry.  Co.  v.  Sailors'  Union,  158  Fed.  541 

(1907) 884 

Dent  V.  West  Va.,  129  U.  S.  114  (1889) 865 

Dewey  v.  Des  Moines,  173  U.  S.  193  (1898) 874 

DiUon  V.  Erie  Ry.,  43  N.  Y.  320  (1897) 878 


TABLE  OF  CASES  XXV 

PAGE 

Dingley  v.  Boston,  100  Mass.  544  (1868) 868 

Directors,  etc.,  v.  Houston,  71  111.  308  (1874) 869 

Dixon  V.  People,  63  lU.  App.  590  (1895) 859 

Dobbins  v.  City  of  Los  Angeles,  195  U.  S.  223  (1904) 862 

Dodge  V.  Woolsey,  18  How.  331  (1855) 861 

Donavon  v.  Penn.  Ry.,  199  U.  S.  279  (1905) 163 

Donnelly  v.  Decker,  58  Wis.  461;  46  Am.  Rep.  437  (1883) ...  875 

Doty  V.  Johnson,  6  Fed.  481  (1881) 860 

Dow  V.  Gould,  etc..  Mining  Co.,  31  Cal.  637  (1867) 856 

Draining  Co.  Cases,  11  La.  An.  338  (1856) 875 

Duffy  V.  Jarvis,  84  Fed.  731  (1898) 472 

Dunbar  v.  Boston  &  Providence  Railroad  Corporation,   181 

Mass.  383  (1902) 708 

Dunham  v.  Lamphere,  3  Gray  (Mass.),  268  (1855) 112 

Durkin  v.  Kingston  Coal  Co.,  171  Pa.  St.  193,  202;  33  Atl.  237, 

238  (1895) 709,  873 

Dyckman  v.  Mayor  New  York,  5  N.  Y.  434  (1851) 514 

E 

East  Hartford  v.  Hartford  Bridge  Co.,  10  Howard,  511  (1850) .  862 
Eaton  V.  the  Boston,  Concord  and  Montreal  Railroad,  51  N.  H. 

504,  pp.  510-12  (1872) 67 

Eden  v.  People,  161  lU.  296  (1896) 233 

Edwards,  In  re,  85  Hun  (N.  Y.),  436  (1895) 117,  234,  446 

Eight,  In  re,  Hour  Law,  21  Colo.  29  (1895) 872 

Elam,  Ex  parte,  91  Pac.  (Cal.)  811  (1907) 511 

Elder  V.  Whitesides  et  al,  72  Fed.  724  (1895) 882 

Eldridge  v.  Trezevant,  160  U.  S.  452  (1896) 862,  866,  868 

Emmons  v.  Shaw,  171  Mass.  410  (1904) 446 

Employers'  Teaming  Co.  v.  Teamsters'  Council,  141  Fed.  679 

(1905) 883 

Enterprise  Foundry  Co.  v.  Iron  Moulders  Union,  149  Mich.  31 ; 

112  N.  W.  685  (1907) 883 

Equitable  Life  Ins.  Co.  v.  Clements,  140  U.  S.  226  (1891) 880 

Erb  V.  Morasch,  8  Kan.  App.  61;  54  Pac.  323  (1898) 878 

Ester  Park  Toll  Road  v.  Edwards,  3  Colo.  App.  74;  32  Pac.  549 

(1893) 856 

Eyre  v.  Jacob,  14  Grat.  422  (1858) 417 


xxvi  TABLE  OF  CASES 


F 

PAGE 

Fairchild  v.  Rich,  68  Vt.  202;  34  Atl.  692  (1896) 867 

Fall  Brook  Irrig.  Co.  v.  Bradley,  164  U.  S.  112  (1896) .  .511,  867,  875 

Fanners  Ind.  Ditch  Co.  v.  Ag.  D.  Co.,  22  Colo.  513  (1896). . . .  875 
Farmers  Loan  &  Trust  Co.  v.  N.  P.  Ry.  Co.,  60  Fed.  803  (1894) 

and  63  Fed.  310 882 

Farwell  v.  Boston  &  Worcester  Ry.  Corp.,  4  Metcalf,  49  (1842). 

641,  706 

Fearo  v.  State,  102  Ga.  274  (1897) 856,  858 

Feltham  v.  England,  L.  R.,  2  Q.  B.  36  (1866) 705 

Ferner  v.  State,  151  Ind.  247  (1898) 870 

Fertilizing  Co.  v.  Hyde  Park,  97  U.  S.  659  (1878) 874 

Fisher  v.  St.  Louis,  194  U.  S.  361  (1904) 867 

Fisher  Co.  v.  Woods,  187  N.  Y.  90;  79  N.  E.  836  (1907) 870 

Fiske,  Ex  parte,  72  Cal.  125  (1887) 874 

Fiske  V.  People,  188  III.  206  (1900) 602,  639,  661 

Fitzwater  v.  Warren,  206  N.  Y.  355  (1912) 623,  635 

Fixen,  In  re,  102  Fed.  295  (1900) 291 

Fletcher  v.  Peck,  6  Cranch.  87  (1810) 862 

Folsom  V.  Lewis,  208  Mass.  336;  94  N.  E.  316  (1911) 884 

Foltz  V.  St.  Louis  &  S.  F.  Ry.  Co.,  60  Fed.  316  (1894) 514 

Forbes  v.  Garcey,  94  U.  S.  762  (1876) 859 

Forbell  v.  New  York,  164  N.  Y.  522  (1900) 230 

Ft.  Worth  Ry.  v.  Jennings,  76  Texas,  373  (1890) 856 

Fox's,  In  re.  Estate,  154  Mich.  5  (1908) 445 

Frorer  v.  People,  141  lU.  171  (1893),  31  N.  E.  395.  .67,  233,  658, 

659,  872 

Fry  V.  State,  63  Ind.  532  (1878) 873 

Fulton  L.  H.  &  P.  Co.  v.  State,  123  N.  Y.  S.  1117  (1910) 856 

G 

Gallup  V.  Schmidt,  183  U.  S.  300  (1902) 869 

Garber  v.  Columbia  Tel.  Co.,  20  Lane.  L.  R.  378  (1903) 381 

Garrison  v.  N.  Y.  City,  88  U.  S.  196  (1874) 194,  867 

Geer  v.  Conn.,  161  U.  S.  519  (1896) .  .  . 112,  148,  511 

General  Paper  Co.  v.  U.  S.,  201  U.  S.  117  (1906) 881 

Georgia  v.  Tenn.  Copper  Co.,  206  U.  S.  230  (1907) 511 

Georgia  Ry.  &  B.  Co.  v.  Smith,  70  Ga.  694  (1883) 863 


TABLE  OF  CASES  xxvij 

PAGE 

Gibson  v.  U.  S.,  166  U.  S.  269  (1897) 868 

GiUespie  v.  lU.,  188  lU.  176  (1900) 601 

Giozza  V.  Tieman,  148  U.  S.  657  (1892) 865 

Gladson  v.  Minnesota,  166  U.  S.  427  (1897) 867 

Gleason  v.  Thaw,  185  Fed.  345  (1911) 859 

Glennon  v.  Britton,  155  111.  232  (1895) 875 

Godcharles  v.  Wigeman,  113  Pa.  St.  431  (1886) 233,  639,  871 

Goff  V.  Kilts,  15  Wend.  (N.  Y.)  550  (1836) 112 

Goldfield  G.  M.  Co.  v.  G.  M.  Union,  159  Fed.  500  (1908) ....  883 

Goodi-ich  V.  Detroit,  184  U.  S.  432  (1902) 867 

Googins  V.  Boston  R.  R.,  155  Mass.  505  (1892) 514 

Gould  V.  Electric  Light  Co.,  60  N.  Y.  Supp.  559 259 

"Granger  Cases,"  94  U.  S.  113  (1876) 863 

Grant  v.  Raymond,  6  Pet.  220  at  241  (1832) 193 

Gt.  No.  Ry.  V.  Minn.,  216  U.  S.  206  (1910) 879 

Green  v.  Biddle,  8  Wheat.  1  (1823) 863 

Greene  v.  James,  Fed.  Cases,  No.  5766  (1854) 868 

Greenwood  v.  Union  F.  R.  Co.,  105  U.  S.  13  (1881) 866 

Griffith  V.  Charlotte,  etc.,  Co.,  23  S.  C.  38  (1884) 856 

Guilford,  town  of,  v.  Cornell,  18  Barbour  (N.  Y.),  615  (1854). .  869 

Guthrie  v.  Weaver,  1  Mo.  App.  136  (1876) 861 

H 

Haas  V.  C.  &  N.  W.  R.  R.  Co.,  41  Wis.  44  (1876) 878 

Hagar  v.  Reclamation  Dist.,  Ill  U.  S.  701  (1884) 862 

Hale  V.  Henkel,  201  U.  S.  43  (1906) 881 

HaU  V.  Wisconsin,  103  U.  S.  5  (1880) 862 

Hamilton  v.  Rathbone,  175  U.  S.  421  (1899) 856 

Hamilton  Brown  Shoe  Co.  v.  Saxey,  131  Mo.  212  (1895) 882 

Hamilton  Gas  Light  &  Coke  Co.  v.  Hamilton,  146  U.  S.  258 

(1892) 876 

Hampson  v.  Appeal  Tax  Court.    (Case  not  reported,  but  papers 

in  Clerk's  Office,  Superior  Court  of  Baltimore  City) 232 

Hancock  v.  Yaden,  121  Ind.  366  (1889) 639,  659,  871 

Harbison  v.  Knoxville  Iron  Co.,  103  Tenn.  421;  53  S.  W.  955 

(1899) 260,  859 

Harding  v.  American  Glucose  Co.,  182  111.  551  (1899) 880 

Harding  v.  People,  160  111.  459  (1896) 233,  639,  658 


xxviii  TABLE  OF  CASES 

PAGE 

Harper  v.  Stanbrough,  2  La.  An.  377  (1847) 861 

Harrington  v.  City  of  Providence,  20  R.  I.  233  (1897) 874 

Hartman  v.  Greenhow,  102  U.  S.  672  (1884) 862 

Haskins  v.  Ryan,  75  N.  J.  Eq.  330  (1908) 859 

Hathom  v.  Natural  Carbonic  Gas  Co.,  194  N.  Y.  326;  87  N.  E. 

Rep.  504  (1909) 229,  231 

Haugen  v.  Albina  Water  Co.,  21  Ore.  Ill 259 

Hawarden  v.  Y.  &  L.  C.  Co.,  Ill  Wis.  545;  87  N.  W.  472 

(1901) 884 

Hawkins  v.  Ryan,  73  Atl.  1118  (1909) 860 

Head  v.  Amoskeag  Mfg.  Co.,  113  U.  S.  9  (1885) 866 

Henderson  Bridge  Co.  v.  City  of  H.,  173  U.  S.  592  (1899) 862 

Henry  v.  Dick  Co.,  224  U.  S.  1  (1912) 712 

Henry  v.  Cherry  &  Webb,  30  R.  I.  13;  73  Atl.  97  (1909) 860 

HiJl  et  al.  v.  Antigo  Water  Co.,  3  W.  R.  C.  R.  623,  726,  764 

(1909) 234 

Hipolite  Egg  Co.  v.  U.  S.,  220  U.  S.  45  (1911) 880 

Hitcheron  Coal  &  Coke  Co.  v.  MitcheU,  172  Fed.  963  (1909) ...  884 
Holden  v.  Hardy,  169  U.  S.  366  (1898) .  .639,  661,  678,  706,  865,  872 
Holyoke  Water  Power  Co.  v.  Lyman,  15  Wall.  500  (1872) .  .864,  876 

Home  of  the  Friendless  v.  Rouse,  8  Wall.  430  (1869) 864 

Home  T.  &  T.  Co.  v.  Los  Angeles,  211  U.  S.  265  (1908) 877 

Hopkins  Appeal,  77  Conn.  644  (1905) 445 

Hopkins  et  al.  v.  Oxley  Stave  Co.,  83  Fed.  912  (1897) 883 

Hopkins  v.  U.  S.,  171  U.  S.  578  (1897) 881 

House,  In  re,  BiU  No.  203,  21  Colo.  27;  39  Pac.  431  (1895) ....  871 
Hoxie  V.  New  York,  etc.,  R.  Co.,  82  Conn.  352,  359;  73  Atl.  754, 

757  (1909) 709 

Hubbard  v.  Taunton,  140  Mass.  467  (1886) 180,  197,  232,  870 

Huber  v.  Merkel,  117  Wisconsin,  355,  94  Northwestern,  354 

(1902) 230 

Hudson  Water  Co.  v.  McCarter,  209  U.  S.  340  (1908) 511 

Hurley  v.  Huddingfield,  156  Ind.  416  (1900) 259 

Hurtado  v.  Cal.,  110  U.  S.  516  (1883) 871 


111.  Cent.  R.  Co.  v.  Mattoon,  161  HI.  247  (1896) 856 

Inland  Steel  Co.  v.  Yedinat,  172  Ind.  423;  87  N.  E.  229  (1909).  872 


TABLE  OF  CASES  xxix 

PAGE 

Interstate  Commerce  Comm.  v.  Chi.  Grt.  Ry.  Co.,  209  U.  S.  108 

(1908) 161 

Interstate  Commerce  Comm.  v.  C,  R.  I.  &  P.  Ry.  Co.,  216  U.  S. 

88  (1910) 879 

Interstate  Commerce  Comm.  v.  D.,  L.  &  W.  Ry.  Co.,  216  U.  S. 

531  (1910) 879 

Interstate  Commerce  Comm.  v.  111.  Cent.  Ry.  Co.,  215  U.  S.  452 

(1909) ...879 

Interstate  Commerce  Comm.  v.  N.  P.  Ry.  Co.,  216  U.  S.  538 

(1910) 879 

Interstate    Commerce    Comm.    v.    Stickney,   215    U.    S.   98 

(1909) 879 

Interstate  Consol.  St.  Ry.  Co.  v.  Mass.,  207  U.  S.  79  (1907). . .  876 

Ionia  Co.  Sav.  Bank  v.  McLean,  84  Mich.  629  (1891) 860 

Iowa  Life  Ins.  Co.  v.  East  Mut.  L.  Ins.  Co.,  64  N.  J.  L.  340;  45 

Atl.  762  (1900) 880 

Ives  V.  S.  Buffalo  R.  R.  Co.,  201  N.  Y.  271,  287;  94  N.  E.  431, 

437  (1911) 235,  678,  709 

J 

Jackson  v.  Housel,  17  Johns.  (N.  Y.)  281  (1820) 106,  855 

Jacobs,  In  re,  98  N.  Y.  98  (1885) 678,  695,  870,  873 

James  v.  Barray,  128  S.  W.  (Kent.)  1070  (1910) 859 

Jenkins  v.  International  Bank,  106  U.  S.  571  (1882) 856,  860 

Jensen  v.  Cook  &  Waiters  Union,  39  Wash.  531;  81  Pac.  1069 

(1905) 883 

Jensen  v.  S.  D.  Cent.  Ry.,  25  S.  D.  506;  127  N.  W.  650 

(1910) 878 

Johnson  v.  Phil.  &  R.  Ry.  Co.,  163  Pa.  St.  127  (1894) 873 

Johnson  V.  U.  S.,  17  Ct.  Claims,  157  (1881) 861 

Jones  V.  Brim,  165  U.  S.  180  (1897) 875 

Jones  V.  Leslie,  61  Wash.  107;  112  Pac.  81  (1910) 859 

Jones  V.  Mahler,  116  N.  Y.  S.  180  (1908)  and  125  N.  Y.  S. 

1126  (1910) 884 

Jones  V.  People,  110  111.  590  (1884) 639,  659 

Jones  v.  Van  Winkle  Gin  &  M.  Wks.,  131  Ga.  336;  62  S.  E. 

236  (1908) 884 

Jones  V.  Van  Zandt,  4  McLean  (U.  S.),  603  (1849) 856 


XXX  TABLE  OF  CASES 

PAGE 

Jones  Glass  Co.  v.  Glass  Bottle  Blowers  Ass'n,  77  N.  J.  Eq. 

219  (1911) 884 

Joy  V.  St.  Louis,  138  U.  S.  1  (1893) 882 

K 

Kansas  v.  Colorado,  185  U.  S.  125  (1902) 511 

Kansas  v.  Colorado,  206  U.  S.  46  (1907) 511 

Katz  V.  Walkinshaw,  143  California  116  (1903) 230 

Kawananakoa  v.  Polybank,  205  U.  S.  349  (1907) 198 

Kean  v.  Driggs  Drainage  Co.,  45  N.  J.  L.  91  (1883) 868 

Keeney,  In  re,  194  N.  Y.  281  (1909) 445 

KeUey  v.  C,  M.  &  St.  P.  Ry.  Co.,  142  Wis.  154;  125  N.  W.  464 

(1910) 873 

Kelly  V.  Herrman,  155  Fed.  887  (1906) 742 

Kellyville  Coal  Co.  v.  Harrier,  207  111.  624  (1904) 233,  640 

Kidd,  In  re,  188  N.  Y.  274  (1907) 446 

Kidd  V.  Pearson,  128  U.  S.  26  (1887) 869 

Kidd  Dater  &  P.  Co.  v.  Musselman  Groc.  Co.,  217  U.  S.  416 

(1910) 870 

Kilpatrick  v.  G.  T.  Ry.  Co.,  74  Vt.  288  (1902) 640 

King  V.  Gotz,  70  Cal.  236;  11  Pac.  656  (1886) 858 

King  Lumber,  etc.,  Co.  v.  Atlantic  Coast  Line  Ry.  Co.,  58  Fla. 

292;  50  So.  509  (1909) 379 

Kirtland  v.  Hotchkiss,  100  U.  S.  491  (1879) 869 

Knight  V.  U.  S.  Land  A.,  142  U.  S.  161  (1891) 859 

Knight  &  JiUson  Co.  v.  Miller,  172  Ind.  27;  87  N.  E.  823  (1909).  880 

Knisley  v.  Pratt,  148  N.  Y.  372  (1896) 623 

Knoxville  v.  Water  Co.,  212  U.  S.  9  (1909) 234 

KnoxviUe  Iron  Co.  v.  Harbison,  183  U.  S.  13  (1901) .  .233,  260, 

608,  639,  650,  659 

Knudson  v.  Benn,  123  Fed.  636  (1903) 883 

Koehler,  Ex  parte,  23  Fed.  529  (1885) 863 

KoUock  V.  City  of  Stevens  Point,  37  Wis.  348  (1875) 194 

Krebelkamp  v.  Fogg,  52  111.  App.  563  (1894) 860 

Kuback,  Ex  parte,  85  Cal.  274  (1890) 639,  872 

Kuter  V.  Mich.  C.  Ry.,  14  Fed.  Cases,  No.  7955  (1853) 291 


TABLE  OF  CASES  xxxi 


PAGE 

La  Crosse  v.  La  Crosse  Gas  &  El.  Co.,  145  Wis.  408  (1911) ....  705 
La  Crosse  v.  Wisconsin  Telephone  Co.,  7  Wisconsin  Railroad 

Commission  Reports,  435 233 

Ladd  V.  Boston,  151  Mass.  585  (1890) 489,  514 

L.  S.  &  M.  S.  Ry.  Co.  v.  C.  &  W.  L  R'd.  Co.,  97  111.  506  (1881).  164 

L.  S.  &  M.  S.  Ry.  V.  Smith,  173  U.  S.  684  (1899) 878 

Lake  S.,  etc.,  R.  R.  v.  Ohio,  173  U.  S.  285  (1898) 869 

Lake  View  v.  Rose  Hill  Cemetery,  70  lU.  192  (1873) 259 

Lamb  v.  Schottler,  54  Cal.  319  (1880) 194 

Lance's  Appeal,  55  Pa.  St.  16  (1867) 194 

Lathrop  v.  Racine,  119  Wis.  461;  97  N.  W.  492  (1903) 867 

Law,  Ex  parte,  15  Fed.  Cases,  No.  8,  126  (1866) 856 

Lawrence  v.  Rutland  R.  R.  Co.,  80  Vt.  370;  67  Atl.   1091 

(1907) 871 

Lawton  v.  Steele,  152  U.  S.  133  (1893) 869,  875 

Leavenworth  Comity  v.  Miller,  7  Kans.  479  (1871) 164 

Leep  V.  St.  Louis  Ry.  Co.,  58  Ark.  407  (1894) 67,  639,  658 

Lemieux  v.  Young,  211  U.  S.  489  (1909) 870 

Lent  V.  TiUson,  140  U.  S.  316  (1891) 867 

Leslie  v.  Rothers,  2  Chap.  499  (1894) 129 

Light  V.  U.  S.,  220  U.  S.  523  (1910) 511,  882 

Lincoln  v.  Davis,  53  Mich.  375  (1884) 112 

Lindsay  &  Co.  v.  Montana  Fed.  of  Labor,  96  Pac.  127  (1908) . .  883 
Liverpool  &  G.  W.  Steam  Co.  v.  Phenix  Co.,  129  U.  S.  397 

(1889) 661 

Lloyd  V.  Wayne  Circuit  Judge,  56  Mich.  236;  23  N.  W.  28 

(1885) 868 

Loclmer  v.  N.  Y.,  198  U.  S.  45  (1905) 214,  662,  678,  707,  708 

Loesch  V.  Koehler,  144  Ind.  278  (1895) 875 

Loewe  v.  Cal.  St.  Federation,  139  Fed.  71  (1905) 883 

Long  Island  Water  S.  Co.  v.  Brooklyn,  166  U.  S.  685  (1897) .  858,  862 
Lord  V.  Equitable  Life  Ins.  Co.,  94  N.  Y.  S.  65;  109  App.  Div. 

252  (1905) 865 

Lore  V.  Amer.  Mfg.  Co.,  160  Mo.  608  (1901) 623 

Los  Angeles  v.  L.  A.  Water  Co.,  177  U.  S.  558  (1900) 861 

Lothrop  V.  Stedman,  Fed.  Cases,  No.  8519  (1875) 863 

LouisviUe  v.  Cochran,  82  Ky.  15  (1884) 869 


xxxii  TABLE  OF  CASES 

PAGE 

Louisville  v.  Commonwealth,  1  Duval  (Ky.),  298,  295,  at  298 

(1864) 115 

L.  &  N.  Ry.  V.  Kent,  183  U.  S.  503  (1902) 878 

Lowt'.  Rees  P.  Co.,  41  Neb.  127;  59  N.  W.  362  (1894) .  .639,  709, 

857,  872 
Lowry  et  al.  v.  Tile,  etc.,  Ass'n,  106  Fed.  38  (1900)  and  Mon- 
tague &  Co.  V.  Lowry,  115  Fed.  27  (1902) 881 

Lusk  V.  Hotchkiss,  37  Conn.  219  (1870) 872 

Lynde  v.  Rockland,  66  Me.  309  (1876) 194 

M 

McCarthy  v.  Guild,  53  Mass.  291  (1847) 856 

McCarthy  v.  Mayor  of  N.  Y.,  96  N.  Y.  1  (1884) 872 

McClure  v.  Cook,  39  W.  Va.  579;  20  S.  E.  612  (1894) 856 

McCormick,  In  re,  132  N.  Y.  App.  Div.  921  (1909);  90  N.  E. 

1161 884 

McCoy  V.  1.  St.  L.  &  C.  R.  Co.,  13  Fed.  3  (1882) 164 

McCready  v.  Virginia,  94  U.  S.  391  (1876) 112,  293,  511 

McCullom  V.  Smith,  19  Tenn.  342  (1838) 861 

McCully  V.  C,  B.  &  Q.  Ry.  Co.,  212  Mo.  1;  110  S.  W.  711 

(1908) 879 

McCutcheon  v.  Marshall,  8  Peters,  220  (1834) 857 

McDermott  v.  State,  143  Wis.  18;  126  N.  W.  888  (1910) 870 

McGee  v.  Mathis,  4  WaU.  143  (1866) 862 

McGrewy.  Mo.  Pac.  Ry.,  230  Mo.  496;  132  S.  W.  1076  (1910).  878 

McGuire  v.  C,  B.  &  Q.  Ry.  Co.,  131  la.  340  (1906) 705 

McKeon  v.  Bisbee,  9  Cal.  137  (1858) 106 

McKinne  v.  Ga.,  81  Ga.  164  (1888) 195 

McLean  v.  State,  98  S.  W.  (Ark.)  729  (1906) 233,  871 

McMurray  v.  Schuck,  99  Am.  Dec.  662  (1869) 291 

McPherson,  In  re,  104  N.  Y.  306  (1887) 445,  874 

Mackall  v.  Ratchford,  82  Fed.  41  (1897) 883 

Mackey  Estate,  In  re,  46  Colo.  79  (1909) 445 

Madera,  In  re,  Irrig.  Dist.,  92  Cal.  296  (1891) 867 

Madison  Gas  and  Electric  Co.,  In  re,  12  Wisconsin  Railroad 

Commission  Reports,  293  (1913) 233 

Magoun  v.  111.  Trust  &  Savings  Bank,  107  U.  S.  283  (1898) 

416,  874 


TABLE  OF  CASES  xxxiii 

PAGE 

Maier,  Ex  parte,  103  Cal.  476  (1894) 112 

Manchester  v.  Mass.,  139  U.  S.  240  (1891) 511 

Manhattan  Mfg.  &  Fert.  Co.  v.  Van  Keuren,  23  N.  J.  Eq.  251 

(1872) 867 

Manigault  v.  Springs,  199  U.  S.  473  (1905) 511,  862 

Manitowoc  v.  Manitowoc  &  N.  Traction  Co.,  145  Wis.  13 

(1911) 705 

Manning  v.  Mitcherson,  69  Ga.  447  (1882) 112 

Marchant  v.  Penn.  Ry.  Co.,  153  U.  S.  380  (1894) 868 

Marshall,  In  re,  102  Fed.  323  (1900) 859,  875 

Marshall  v.  Amer.  Tel.  &  T.  Co.,  16  Penn.  Sup.  Ct.  615  (1901).  381 

Martin  v.  D.  C,  205  U.  S.  135  (1907) 870 

Martin  v.  Waddell,  16  Pet.  367  (1842) 112 

Mathews  v.  Associated  Press,  136  N.  Y.  333  (1893) 880 

Matthews  v.  People,  202  111.  389  (1903) 67,  640 

Menominee  &  Marinette  Light  &  Traction  Co.,  In  re,  3  W.  R. 

C.  R.  778,  779  (1909) 234 

Merz  Capsule  Co.  v.  U.  S.  Capsule  Co.,  67  Fed.  414  (1895) ....  880 
Metropolitan  Board  of  Health  v.  Heister,  37  N.  Y.  661  (1868).  874 
Metropolitan  C.  Ry.  Co.  v.  Chicago,  etc.,  Ry.  Co.,  87  111.  317 

(1877) 856,  858 

Metropohtan,  In  re,  El.  R.,  2  N.  Y.  Supp.  278  (1888) 514 

Metropohtan  Exhib.  Co.  v.  Ewing,  7  L.  R.  A.  381;  42  Fed. 

198  (1890) 742 

Metropolitan  Exhib.  Co.  v.  Ward,  24  Abb.  (N.  C),  393;  9  N.  Y. 

Supp.  779  (1890) 742 

Mejevv.  Shields,  61  Fed.  713  (1894) 869 

Michigan  Rate  Cases,  143  U.  S.  339  (1892) 885 

Miles  (Dr.)  Medical  Co.  v.  John  D.  Park  &  Sons,  220  U.  S.  373 

(1911) 193,  712 

Miller,  In  re,  77  N.  Y.  App.  Div.  473  (1902) 446 

Miller  v.  C,  B.  &  Q.  R.  R.,  65  Fed.  305  (1894) 873 

Millett  V.  People,  117  111.  294;  7  N.  E.  631  (1886). . .  .233,  695,  871 

Mills  V.  Wilhams,  11  Iredale  (N.  C),  558  (1850) 199 

Milwaukee  Elec.  Ry.  &  Light  Co.  v.  Milwaukee,  87  Fed.  577 

(1898) 876,  877 

M.,  St.  P.  &  S.  S.  M.  Ry.  Co.  v.  Rd.  Comm.,  136  Wis.  146 

(1908) 705 


xxxiv  TABLE  OF  CASES 

PAGE 

Minneapolis  &  St.  P.  Ry.  Co.  v.  Emmons,  149  U.  S.  364  (1893).  877 

Minneapolis  &  St.  P.  Ry.  Co.  v.  Minn.,  186  U.  S.  257  (1902) ...  878 

Minot  V.  Winthrop,  162  Mass.  113  (1894) 445 

Mitchell  V.  Warner,  5  Conn.  497  (1825) 861 

Mo.  Pac.  Ry.  v.  Humes,  115  U.  S.  512  (1885) 865 

Mo.  Pac.  Ry.  Co.  v.  Nebraska,  164  U.  S.  403  (1896) 868 

M.,  J.  &  K.  C.  Ry.  Co.  v.  Tumipseed,  219  U.  S.  35  (1910).  873 

Mobile  &  Ohio  R.  R.  v.  State,  51  Miss.  137  (1875) 878 

Mobile  &  0.  R.  R.  v.  Tenn.,  153  U.  S.  486  (1894) 864 

Mobile  V.  Water  Supply  Co.,  130  Ala.  379  (1900) 259 

Montague  &  Co.  v.  Lowry,  115  Fed.  27  (1902) 880,  881 

Monteith  v.  Kokomo  Wood  Enal.  Co.,  159  Ind.  149  (1902) ....  623 

Montellone  v.  Seaboard,  etc.,  Ins.  Co.,  52  So.  (La.)  1032  (1910).  880 

Morgan,  In  re,  26  Colo.  415  (1899) 639 

Morgan's  L.  &  T.,  etc.,  Co.  v.  R.  R.  Commis.  of  La.,  53  So. 

890  (1910) 879 

Morgan  Envelope  Co.  v.  Albany  Perforated  Wrapping  Co., 

152  U.  S.  425  (1894) 713 

Morrison  v.  Semple,  6  Binn.  (Pa.)  94  (1813) 855 

Mosler,  In  re,  8  Ohio  C.  C.  324  (1894) 870 

Moxley  v.  Ragan,  10  Bush  (Ky.),  156  (1853) 623 

Mumford  v.  C,  R.  I.  &  P.  Ry.  Co.,  128  la.  685  (1905) 705 

Mundy  v.  Van  Hoose,  104  Ga.  292  (1898) 114 

Munn  V.  111.,  94  U.  S.  113  (1876) 225,  234,  259,  871,  876,  885 

Munn  V.  People,  69  111.  80  (1873) 870 

Murdock  v.  Cincinnati,  44  Fed.  726  (1891) 867 

Murdock,  Kerr  &  Co.  v.  Walker  et  al,  152  Pa.  St.  595;  25  Atl. 

492  (1893) 882 

Murray  v.  Charleston,  96  U.  S.  432  (1877) 862 

Murray  v.  Hoboken  Land  &  Imp.  Co.,  18  Howard,  272  (1855).  864 
Murray  v.  South  Carolina  Ry.  Co.,  1  McMullan,  385  (S.  S., 

1841) 641,  706 

Mutual  Fire  Ins.  Co.  v.  Deale,  18  Md.  26;  79  Am.  Dec.  674 

(1861) 860 

N 

Nashville,  C.  &  St.  L.  Ry.  Go.  v.  Alabama,  128  U.  S.  96  (1888) .  878 
Nashville,  etc.,  Ry.  Co.  v.  McConnell,  82  Fed.  65  (1897) 883 


TABLE  OF  CASES  xxxv 

PAGE 

Nat.  Bank  W.  Ark.  v.  Sebastian  Co.,  Fed.  Gases,  No.  10,040 
(1879) 861 

National  Fireproofing  Co.  v.  Mason  Builders'  Ass'n,  169  Fed. 

259  (1909) 884 

National  Harrow  Co.  v.  Hench,  76  Fed.  667  (1896);  186  U.  S. 

70  (1902) 880 

National  Tel.  U.  Co.  v.  Western  U.  Tel.  Co.,  119  Fed.  294 

(1903) 858 

Nellis  V.  Nellis,  99  N.  Y.  505  (1885) 472 

Nelson  v.  Minneapolis,  127  N.  W.  445  (1910) 870 

Nelson  v.  U.  S.,  201  U.  S.  92  (1906) 881 

New  Jersey  v.  Wilson,  7  Cranch.  164  (1812) 864 

New  Jersey  v.  Yard,  95  U.  S.  104  (1877) 864 

New  Orleans  Gas  Light  Go.  v.  Drainage  Commission,  197  U.  S. 

453  (1905) 866 

New  Orleans  Gas  Light  Go.  v.  Louisiana  Light,  etc.,  Co.,  115 

U.  S.  650  (1885) 877 

Newton  v.  Raper,  150  Ind.  630;  50  N.  E.  749  (1898) 869 

Newton  Go.  v.  Erickson,  126  N.  Y.  S.  949  (1911) 884 

New  York  ex  rel.  N.  Y.  Electric  Lines  Co.  v.  Squire,  145  U.  S. 

175  (1892) 866 

N.  Y.  C.  &  H.  R.  R.  Co.  V.  Williams,  118  N.  Y.  S.  785  (1909) . .  871 

N.  Y.  G.  &  I.  W.  Co.  V.  Brennan,  105  N.  Y.  S.  865  (1907) 883 

N.  Y.,  etc.,  R.  R.  Co.  v.  N.  Y.,  165  U.  S.  628  (1897) 867 

N.  Y.  Sanitary  U.  Co.  v.  Dept.  Pub.  Health,  70  N.  Y.  S.  510 

(1901) 874 

Nicholas  v.  Walter,  37  Minn.  264  at  272  (1887) 650 

Nickerson  v.  Boston,  131  Mass.  300  (1881) 867 

Noble  State  Bank  v.  Haskell,  219  U.  S.  104  (1911) 220,  229 

Nordenfelt  v.  Maxim  Nordenfelt  Co.,  A.  C.  535  (1894) 571 

North  A.  Cold  St.  Go.  v.  Chicago,  151  Fed.  120  (1907) 870 

N.  A.  Gold  Storage  Go.  v.  Chicago,  211  U.  S.  306  (1908) 875 

N.  O.  Gas  Light  Go.  v.  La.  Gas  &  H.  Co.,  115  U.  S.  650  (1885) .   862 

N.  O.  &  T.  P.  Ry.  Co.  v.  Kent,  115  U.  S.  364  (1902) 869 

Northern  Securities  Go.  v.  U.  S.,  193  U.  S.  197  (1904) 678,  881 

N.  W.  Fertihzing  Go.  v.  Hyde  Park,  97  U.  S.  659  (1877) 862 

N.  W.  Mut.  Life  Ins.  Go.  v.  Lewis  et  al,  28  Mont.  484;  72  Pac. 

982  (1903) 858 


xxxvi  TABLE  OF  CASES 

PAGE 

Northwestern  University  v.  111.,  99  U.  S.  309  (1899) 864 

Nunnemacher  v.  The  State,  129  Wis.  190  (1906) 444 

Nutting  V.  Commonwealth  of  Mass.,  183  U.  S.  553  (1902) ....  870 

O 

Ogden  V.  Saunders,  12  Wheat.  213  (1827) 861 

Ohio  ex  rel.  v.  Ferris,  53  U.  S.  314  (1895) 449 

Ohio  &  Mississippi  Raikoad  Co.  v.  McClure,  10  Wall.  51 1  (1870) .  861 
Ohio  Oil  Co.  V.  Ind.,  177  U.  S.  190  (1900) ....  147,  160,  229,  511,  867 
Oklahoma   v.    Kansas    Natural   Gas    Co.,   221    U.    S.    229 

(1911) 160,  229,  511 

Old  Colony  Ry.  Co.  v.  Plymouth  Co.,  14  Gray  (Mass.),  161 

(1859) 859 

Oregon  R.  &  Nav.  Co.  v.  Campbell,  173  Fed.  957  (1909) 879 

Orient  Ins.  Co.  v.  Daggs,  172  U.  S.  557  (1869) 880 

Otis  Steel  Co.  v.  Local  Union,  110  Fed.  698  (1901) 883 

Owensboro  v.  Commonwealth,  105  Ky.  344  (1899) 115 

Oxley  Stave  Co.  v.  Coopers  Union,  72  Fed.  659  (1895) 882 

P 

Pacific  Gas  Imp.  Co.  v.  Ellert,  64  Fed.  421  (1894) 865 

Page  V.  Edmund,  187  U.  S.  596  (1902) 860 

Pahner  v.  Hickory  Grove  Cemetery,  82  N.  Y.  Supp.  973  (1903).  584 

Pahner  v.  Tmgle,  55  Ohio  St.  423  (1896) 872 

Parker  v.  Davis,  12  Wall.  461  (1870) 861 

Parkinson  &  Co.  v.  Building  Trades  Coimcil,  155  Cal.  508;  58 

Pac.  1027  (1908) 884 

Parrott,  In  re,  1  Fed.  481  (1880) 859 

Patapsco  Guano  Co.  v.  Board  of  Ag.,  52  Fed.  690  (1892) 870 

Patterson  v.  The  Endora,  190  U.  S.  169  (1903) 640 

Patterson  v.  Wilson,  101  N.  C.  584  at  588  (1888) 291 

Paul  V.  Virginia,  8  Wall.  168  (1868) 880 

Paulis,  In  re,  144  Fed.  472  (1906) 870 

Paulsen  v.  Portland,  149  U.  S.  30  (1893) 867 

Peabody  v.  U.  S.,  43  Ct.  C.  5  (1907) 856 

Pearsall  v.  Gt.  No.  R.  R.,  73  Fed.  933  (1895) 864 

PearsaU  v.  Gt.  No.  Ry.,  161  U.  S.  646  (1895) 862 


TABLE  OF  CASES  xxxvii 

PAGE 

Peel  SpUnt  Coal  Co.  v.  State,  36  W.  Va.  802;  15  S.  E.  1000 

(1892) 259,  608,  650,  871 

Peik  V.  Chicago  &  N.  W.  R.  R.,  94  U.  S.  164  (1876) 871,  885 

Pennsylvania  College  Cases,  13  Wall.  190  (1871) 863 

Peonage  Cases,  123  Fed.  671  (1903) 734,  735 

People  V.  B.  &  0.  R.  R.  Co.,  70  N.  Y.  569  (1877) 878 

People  ex  rel.  v.  Beck,  144  N.  Y.  225  (1894) 661 

People  V.  Bellet,  99  Mich.  151  (1894) 650 

People  V.  Bridges,  142  111.  30  (1892) 112 

People  V.  Budd,  117  N.  Y.  1  (1889),  259,  871,  and  Budd  v. 

People,  143  U.  S.  517  (1892) 871 

People  V,  Chicago  Gas  Trust  Co.,  130  111.  268  (1889) 880 

People  V.  Cipperly,  101  N.  Y.  631  (1879) 869 

People  V.  C.  P.  Ry.  Co.,  105  Cal.  576  (1895) 650 

People  V.  Coler,  166  N.  Y.  1,  16;  59  N.  E.  716,  721  (1901) 

640,  658,  709,  710 

People  V.  Commissioners,  59  N.  Y.  92  (1874) 876 

People  V.  Doxtater,  75  Hun  (N.  Y.),  272  (1894) 112 

People  V.  Ewer,  141  N.  Y.  129  (1894) 872 

People  V.  Fallon,  152  N.  Y.  112  (1897) 873 

People  V.  Formosa,  131  N.  Y.  478  (1892) 880 

People  V.  Gillespie,  48  N.  Y.  882  (1898) 875 

People  V.  Hesterberg,  211  U.  S.  31  (1908) 875 

People  V.  Jackson  &  M.  Plank  R.  R.,  9  Mich.  285  (1861) 863 

People  V.  Jones,  241  111.  482;  89  N.  E.  752  (1909) 857 

People  V.  Ketchum,  72  111.  212  (1874) 864 

People  V.  Luhrs,  195  N.  Y.  377  (1909) 869 

People  V.  Moorman,  86  Mich.  434  (1891) 870 

People  V.  New  York  Carbonic  Gas  Co.,  196  N.  Y.  421 ;  90  North- 
eastern, 441  (1910) 231 

People  V.  North  River  Sugar  Ref.  Co.,  121  N.  Y.  582  (1890) ...  880 
People  V.  O'Brien,  111  N.  Y.  1;  18  N.  E.  692  (1888).  .472,  584,  868 

People  V.  Phyfe,  136  N.  Y.  554  (1893) 872 

People  V.  Ryder,  12  N.  Y.  S.  48  (1890) 868 

People  V.  Sheldon,  139  N.  Y.  251  (1893) 880 

People  V.  Smith,  108  Mich.  527  (1896) 873 

People  ex  rel.  v.  Tax  Com.,  199  U.  S.  1  (1905) 515 

People  ex  rel.  v.  Tax  Com.,  174  N.  Y.  417  (1903) 515 


xxxviii  TABLE  OF  CASES 

PAGE 

People  V.  Waldorf-Astoria  Hotel  Co.,  103  N.  Y.  434  (1907) ....  871 
People  ex  rel.  Walker  v.  Special  Sessions,  4  Hun  (N.  Y.),  441 

(1875) 195 

People  V.  Warden  City  Prison,  144  N.  Y.  529  (1895) 871 

People  V.  Warden  City  Prison,  157  N.  Y.  116  (1898) 870 

People  V.  Warren,  34  N.  Y.  S.  942  (1895) 872 

People  V.  Webster,  40  N.  Y.  S.  1135  (1896) 870 

People  V.  Williams,  24  Mich.  156  (1871) 291 

People's  Gas  Co.  v.  Tyner,  131  Ind.  277  at  281  (1891) 193,  219 

Petit  V.  Minnesota,  177  U.  S.  164  (1898) 233 

Philadelphia  Ass'n,  etc.,  v.  Wood,  39  Pa.  St.  73  (1861) 869 

Phillips  V.  Postal  Tel.  Cable  Co.,  131  N.  C.  225;  42  S.  E.  587 

(1902) 868 

Pierce  v.  N.  H.,  5  How.  583  (1846) 869 

Pierson  v.  Post,  2  Am.  Dec.  264  (1805) 112 

Piqua  Bank  v.  Kroop,  16  How.  369  (1853) 876 

Pirie  V.  Chicago  Title  Co.,  182  U.  S.  438  (1901) 291 

Pittsburg  &  C.  Rd.  Co.  v.  S.  W.  P.  Ry.  Co.,  77  Pa.  St.  173  (1874)  878 
Pittsburg,  C,  C.  &  St.  L.  Ry.  Co.  v.  Montgomery,  152  Ind. 

(1898) 873 

Plummer  v.  Coler,  178  U.  S.  115  (1900) 444,  445 

Pollock  V.  Speidel,  17  Ohio  St.  439  (1867) 472 

Preston,  In  re,  63  Ohio  St.  428  (1900) 658 

Priestley  v.  Fowler,  3  M.  &  W.  1  (1837) 641,  705 

Priewe  v.  Wis.,  etc.,  Co.,  93  Wis.  534;  67  N.  W.  918  (1896) ....  868 

Prigg  V.  Penn.,  16  Peters,  539  (1842) 869 

Proctor  V.  Wells,  103  Mass.  216  (1869) 112 

Puget  Sd.  Nat.  Bank  v.  Mather,  60  Minn.  362  (1895) 860 

PuUen  V.  Commissioners,  66  N.  C.  361  (1872) 199,  417 

Pullman  Co.  v.  Kansas,  216  U.  S.  56  (1910) 878 

Purvis  V.  Local  Union,  214  Pa.  St.  348;  63  Atl.  58  (1906) 884 

Q 

Queens  Ins,  Co.  v.  State,  86  Tex.  250;  24  S.  W.  397  (1893) ....  882 

R 

R.  R.  Commission  Cases,  116  U.  S.  307  (1886) 864,  884 

R.  R.  Co.  V.  Davis,  19  N.  C.  451  (1837) 514 


TABLE  OF  CASES  xxxix 

PAGE 

Railroad  Co.  v.  Iron  Works,  31  W.  Va.  710  (1888) 164 

Rd.  Co.  V.  Lockwood,  17  Wall.  357  (1873) 660 

R.  R.  Tax  Cases,  13  Fed.  722  (1882) 869 

Raleigh  &  G.  Ry.  Co.  v.  Davis,  19  N.  C.  451  (1837) 194 

Ramsay  v.  People,  142  111.  380;  37  N.  E.  364  (1892) 233,  871 

Reed  v.  Wright,  2  Greene  (la.),  15  (1849) 868 

Reetz  V.  Mich.,  188  U.  S.  505  (1903) 865 

Reinecke  Coal  Min.  Co.  v.  Wood,  112  Fed.  477  (1901) 883 

Republic  Iron  &  Steel  Co.  v.  State,  160  Ind.  379  (1903) 640 

Rexroth  v.  Coon,  15  R.  I.  35  (1885) 112 

Reynolds  v.  Davis,  198  Mass.  294  (1908) 883 

Reynolds  v.  Everett,  144  N.  Y.  189;  39  N.  E.  72  (1894) 882 

Richards,  Ex  parte,  117  Fed.  658  (1902) 883 

Richmond  v.  Daniel,  55  Va.  393  (1858) 860 

Richmond  v.  Southern  Bell  T.  &  T.  Co.,  85  Fed.  19  (1898).  .  .  870 
Richmond,  F.  &  P.  R.  R.  Co.  v.  Louisiana  R.  R.  Co.,  13  How- 
ard, 71  (1851) 863 

Richmond,  F.  &  P.  R.  R.  Co.  v.  City  of  Richmond,  96  U.  S.  521 

(1877) 867,  877 

Rigney  v.  Chicago,  102  111.  64  (1881) 856 

Riley  v.  Franklin  Ins.  Co.,  43  Wis.  449  (1877) 880 

Ripley  v.  Evans,  87  Mich.  217  (1891) 872 

Ritchie  v.  People,  155  111.  98  (1895) 601,  650,  651,  686,  872 

Ritchie  &  Co.  v.  Wayman,  44  111.  509  (1910). . .  . .  .601,  651,  872 

Rochester  R.  Co.  v.  City  of  R.,  205  U.  S.  236  (1906) 862 

Rocky  Mt.  Bell  Tel.  Co.  v.  Mont.  Fed.  Lab.,  156  Fed.  809  (1907).  883 
Roeder  v.  Robert-son,  202  Mo.  522;  100  S.  W.  1086  (1907).  . . .  876 

Rogers  Park  Water  Co.  v.  Fergus,  180  U.  S.  624  (1901) 877 

Rohrer,  In  re,  140  U.  S.  545  (1890) 873 

Ross  V.  Desha  Levee  Board,  83  Ark.  170;  103  S.  W.  380  (1907).  875 

Ruggles  V.  111.,  108  U.  S.  526  (1883) 864,  885 

Ruggles  V.  People,  91  111.  256  (1878) 863 

Russell  V.  Ralph,  53  Wis.  328;  10  N.  W.  518  (1881) 856 

Russell  &  Sons  v.  Stampers'  Union,  107  N.  Y.  S.  303  (1907)  ...  883 

S 

Saddlers'  Co.  v.  Badcock,  2  Atk.  554  (1743) 623 

Sailors'  Union  v.  H.  Lumber  Co.,  156  Fed.  450  (1907) 883 


xl  TABLE  OF  CASES 

PAGE 

St.  John  V.  Dann,  66  Conn.  401  (1895) 472 

St.  Louis  V.  Gait,  179  Mo.  8  (1903) 511 

St.  Louis  V.  Hill,  116  Mo.  527;  22  S.  W.  861  (1893) 857 

S.  L.  &  S.  F.  Ry.  Co.  v.  Armes,  136  S.  W.  (Tex.)  1164  (1911) ...  873 

St.  Marys,  etc.,  Co.  v.  W.  Va.,  203  U.  S.  183  (1906) 876 

Sampson  v.  Shaw,  101  Mass.  145  (1869) 880 

San  Diego  L.  &  T.  Co.  v.  Jasper,  89  Fed.  274  (1898) 875 

San  Joaquin  &  King  R.,  etc.,  Co.  v.  Stanislaus  Co.,  90  Fed.  516 

(1898) 877 

Santa  Anna  Water  Co.  v.  Town  of  Santa  Barbara,  56  Fed.  339 

(1893) 877 

Sawyer  v.  Vt.,  etc.,  Ry.  Co.,  105  Mass.  196  (1870) 877 

Scharf  v.  Tasker,  73  Md.  378;  21  Atl.  56  (1891) 869 

Schlang  v.  Ladies'  Waistmakers'  Union,  124  N.  Y.  S.  289  (1910).  884 

Schlemmer  v.  B.  R.  &  P.  Ry.  Co.,  205  U.  S.  1  (1906) 879 

SchHtz  V.  Roenitz,  86  Wis.  31;  56  N.  W.  194  (1893) 865 

Schmidt  v.  Muscatine  County,  120  la.  267  (1903) 194 

Scholey  v.  Rew,  23  Wall.  331  (1874) 445 

SchoU  V.  German  Coal  Co.,  118  111.  427  (1887) 514 

Schwartz  v.  International  Ladies'  Garment  Workers,  124  N.  Y. 

S.  968  (1910) 884 

Scott  V.  Donald,  165  U.  S.  107  (1896) 873 

Scott  V.  McNeal,  154  U.  S.  34  (1894) 865 

Scottish  Union  v.  Wade,  127  S.  W.  (Tex.)  1186  (1910) 880 

Scranton  v.  Wheeler,  179  U.  S.  141  (1900) 856,  857,  866,  868 

Searle  Mfg.  Co.  v.  Terry,  106  N.  Y.  S.  438  (1905) 883 

Seattle  v.  Smyth,  22  Wash.  327  (1900) 639 

Seattle  Brewing  Co.  v.  Hansen,  144  Fed.  1011  (1905) 883 

SentaU  v.  New  Orleans  &  CarroUton  Ry.,  166  U.  S.  698  (1897) 

103,  875 

Sexton  V.  Wheaton,  8  Wheat.  229  (1823) 857 

Shaver  v.  Penn.  Ry.  Co.,  71  Fed.  931  (1896) 67,  639 

Shea  V.  City  of  Muncie,  148  Ind.  14  (1897) 874 

Shepherd  v.  Buffalo,  N.  Y.  &  E.  R.  R.  Co.,  35  N.  Y.  641  (1866).  877 

Shepherd  v.  No.  Pac.  Ry.,  184  Fed.  765  (1911) 878 

Sherry  v.  Perkins,  147  Mass.  212  (1888) 882 

Shine  v.  Fox  Bros.  Mfg.  Co.,  156  Fed.  357  (1907) 883 

Silz  V.  Hesterberg,  211  U.  S.  31  (1908) 110 


TABLE  OF  CASES  xli 

PAGE 

Sinking  Fund  Cases,  99  U.  S.  700  (1878) 856 

Sioux  City  St.  Ry.  Co.  v.  Sioux  City,  138  U.  S.  98  (1891) 862 

Slaughter  House  Cases,  16  Wall.  36  (1872).. 218,  856,  859, 

861,  866,  869,  870 

Smart  v.  Smart,  A.  C.  425  (1892) 623 

Smeltzer  v.  St.  L.  S.  F.  Ry.  Co.,  158  Fed.  649  (1908) 879 

Smith  V.  Carlow,  114  Mich.  67  (1897) 875 

Smith  V.  Furbish,  68  N.  H.  123;  44  Atl.  398  (1894) 856,  857 

Smith  V.  McCullough,  104  U.  S.  27  (1881) 857 

Smith  V.  U.  S.,  1  Peters,  326  (1828) 855 

Smyth  V.  Ames,  169  U.  S.  466  (1897) 234,  871,  878 

Soulard  v.  U.  S.,  4  Peters,  511  (1830) 856,  859 

Southern  Cal.  Ry.  Co.  v.  Ritterford  et  al.,  62  Fed.  796  (1894) . .  882 

Southern  Kansas  R.  v.  Okla.  City,  12  Okla.  82  (1902) 514 

So.  Pac.  Ry.  Co.  v.  B'd  R.  R.  Commissioners,  78  Fed.  236 

(1896) 876 

Southern  Pac.  Terminal  Co.  v.  Interstate  Com.  Com.,  219  U.  S. 

498  (1911) 879 

Southern  Ry.  Co.  v.  Machinists'  Local  Union,  111  Fed.  49 

(1901) 883 

Sparhawk  v.  Yerkes,  142  U.  S.  1  (1891) 860 

Speed,  Estate  of,  216  111.  23  (1905) 445 

Spinning  Co.  v.  Riley,  6  L.  R.  Equity,  551  (1868) 882 

Spring  V.  Hyde  Park,  137  Mass.  554  (1884) 194 

Spring  Valley  W.  Co.  v.  San  Francisco,  165  Fed.  667  (1908) ...  856 
Spring  VaUey  Water  Works  v.  Schottler,  110  U.  S.  347  (1884). 

871,  877 

Stahl  V.  Webster,  11  111.  511  (1850) 858 

Standard  Oil  Co.  of  N.  J.  v.  U.  S.,  173  Fed.  177  (1909)  and  the 

Standard  Oil  Co.  v.  U.  S.,  221  U.  S.  1  (1911) 881 

Standard  Sanitary  Mfg.  v.  U.  S.    Decided  Nov.  18,  1912.    (Ad- 
vance Sheets) 713 

Stanislaus  County  v.  J.  &  K.,  etc.,  Co.,  192  U.  S.  201  (1904). 

234,  875 

Stanton  v.  Lewis,  26  Conn.  444  (1857) 857,  858 

Stat%  V.  Associated  Press,  159  Mo.  410  (1901) 856 

State  V.  Black,  75  Wis.  493  (1890) 860 

State  V.  Bosworth,  54  Conn.  1  (1886) 195 


Xlii  TABLE  OF  CASES 

PAGE 

State  V.  Brass,  2  N.  D.  482  (1892) 259 

State  V.  Brown  &  Sharpe  Mfg.  Co.,  18  R.  I.  16  (1842) 871 

State  V.  Cadwallader,  87  N.  E.  (Ind.)  644  (1909) 857 

State  V.  C,  M.  &  St.  P.,  152  Wis.  342  (Feb.  1913) 235 

State  V.  Coal  &  Coke  Co.,  33  W.  Va.  188  (1889) 871 

State  V.  Cooley,  62  Minn.  183  (1895) 114 

State  V.  Farmers'  L.  &  T.  Co.,  116  U.  S.  307  (1886) 863 

State  V.  Ferris,  53  0.  S.  314  (1895) 445,  449 

State  V.  Fire  Creek  Coal,  33  W.  Va.  188  (1889) 658 

State  V.  Glidden,  55  Conn.  46;  8  Atl.  890  (1887) 882 

State  V.  Goodwell,  33  W.  Va.  179  (1889) 658,  659 

State  V.  Gorman,  40  Minn.  232  (1889) 874 

State  V.  Guilbert,  70  0.  S.  229  (1904) 445 

State  V.  Hamlin,  86  Me.  495;  30  Atl.  76  (1894) 869 

State  V.  Haun,  7  Kans.  App.  509  (1898) 659 

State  V.  Kenosha  Electric  Co.,  145  Wis.  337  (1911) 705 

State  V.  Lee,  37  Mo.  143  (1897) 873 

State  V.  Loomis,  20  S.  W.  (Mo.)  332  (1892) 639,  659,  872 

State  V.  McMahon,  65  Minn.  434  (1896) 870 

State  V.  Main,  69  Conn.  123  (1897) 875 

State  V.  Mayo,  75  Atl.  (Me.)  295  (1909) 869 

State  V.  Mo.  Pac.  Ry.  Co.,  81  Neb.  15  (1908),  and  217  U.  S.  205 

(1910) 879 

State  V.  Mugler,  29  Kan.  252  (1883) 873 

State  V.  New  Orleans,  32  La.  An.  709  (1880) 856 

State  V.  Norton,  7  Ohio  Superior  &  Common  Pleas  Dec.  354 

(1897) 658 

State  V.  Ohio  Oil  Co.,  49  N.  E.  (Ind.)  809  (1898) 571 

State  V.  Pabst,  139  Wis.  561  (1909) 446 

State  V.  Peel  Sphnt  Coal  Co.,  36  W.  Va.  802  (1892) 872 

State  V.  Portland  Nat.  Gas  &  Oil  Co.,  153  Ind.  483;  53  N.  E. 

1089  (1899) 880 

State  V.  Pugh,  15  Mo.  509  (1852) 195 

State  V.  Rapp,  104  la.  305  (1898) 112 

State  V.  Redman  (Wis.),  114  N.  W.  137  (1907) 235 

State  V.  Rodman,  58  Minn.  393  (1894) 112,  146 

State  V.  Snowman,  94  Me.  99  (1900) 112 

State  V.  So.  Pac.  R.  R.,  24  Texas,  80  (1859) 863 


TABLE  OF  CASES  xliii 

PAGE 

State  V.  Standard  Oil  Co.,  218  Mo.  1;  116  S.  W.  909  (1909) ....  880 

State  V.  Telephone  Co.,  17  Nebraska,  126  (1885) 259 

State  V.  Vinsonhaler,  74  Neb.  675  (1905) 445 

State  ex  rel.  Zillner  v.  Kreutzberg,  114  Wis.  530,  537;  90  N.  W. 

1098,  1101  (1902) 709 

State  Bank  v.  Haskell,  219  U.  S.  104  (1911) 870 

State  ex  rel.  Wausau  St.  Ry.  Co.  v.  Bancroft,  Atty.  Gen.  et  al., 

and  State  ex  rel.  Jackson  Milling  Co.  et  al.  v.  Same  (Wis.), 

134  N.  W.  330  (1912) 235 

State  Horse  Cases,  15  Abbot's  Prae.  Rep.  N.  S.  (N.  Y.),  51 

(1873) 195 

Steanerson  v.  Great  Northern  R.  C,  69  Minn.  374  (1897) 234 

Stebbins  v.  Stebbins,  86  Mich.  481  (1891) 859 

Stewart  v.  Erie  &  W.  Transport.  Co.,  17  Minn.  372  (1871) ....   164 
Stolz  V.  Thompson,  44  Minn.  271;  46  N.  W.  410  (1890). .  .870,  873 

Stone  V.  Miss.,  101  U.  S.  814  (1879) 876 

Stone  V.  Wis.,  94  U.  S.  181  (1876) 885 

Strickley  v.  Highland  B.  G.  Mining  Co.,  200  U.  S.  527  (1906). 

514,  866 

Strode  v.  Commonwealth,  52  Pa.  St.  181  (1866) 874 

Stuart  V.  Pahner,  74  N.  Y.  183;  30  Am.  Rep.  289  (1878) 865 

Sturges  V.  Crowninshield,  4  Wheat.  122  (1819) 574 

Sturgis  V.  Ewing,  18  111.  176  (1856) 874 

Succession,  The,  of  Levy,  115  La.  377  (1905) 445 

Superior  Commercial  Club  et  al.  v.  Superior  Water,  Light  & 

Power  Co.,  10  W.  R.  C.  R.  704,  758  (1912) 234 

Susquehanna  R.  R.  Co.  v.  Nesbit,  10  Howard,  395  (1850) 863 

Sutton  V.  Miles,  10  R.  L  348  (1872) 472 

Swan  V.  Williams,  2  Mich.  427  (1852) 163 

Swift  &  Co.  et  al.  v.  U.  S.,  196  U.  S.  375  (1905) 881 

Syracuse  v.  Stacey,  169  N.  Y.  231  (1901) 113,  861 

T 

Talcott  V.  Pine  Grove,  Mich.,  23  Fed.  Cases,  No.  13,735  (1872).  164 
Tampa  Water  Works  v.  City  of  Tampa,  199  U.  S.  241  (1905) . .  863 

Ten  Eyck  v.  Del.  &  R.  Canal,  37  Am.  Dec.  233  (1841) 868 

Tenn.  v.  Davis,  100  U.  S.  300  (1879) 869 

Terrett  v.  Taylor,  9  Cranch.  43  (1815) 863 


xliv  TABLE  OF  CASES 

PAGE 

Thomas  v.  Cincinnati  Ry.  Co.,  62  Fed.  803  (1894) 882 

Thomas  v.  Frederick  School,  7  GiU  &  Johnson,  3G9  (1837) 447 

Thomas  v.  Musical  Union,  121  N.  Y.  45;  24  N.  E.  24  (1890) ....  882 

Thompson  v.  Androscoggin  R.  I.  Co.,  54  N.  H.  545  (1874) 856 

Thompson  v.  Doaksum,  68  Cal.  597  (1886) 859 

Thompson  v.  Kidder,  74  N.  H.  89  (1906) 445 

Thorpe  V.  Rutland,  etc.,  R.  R.,  27  Vt.  139  (1854) 218,  876 

Tilford  V.  Belknap,  31  Ky.  L.  662;  103  S.  W.  289  (1907) 874 

Toledo  &  Ann  Arbor  Ry.  Co.  v.  Pa.  Ry.  Co.,  54  Fed.  746  (1893).  882 

Tomlinson  v.  Jessup,  15  Wall.  454  (1872) 864 

Town  Council  v.  Pressley,  33  S.  C.  56  (1889) 511 

Townsend  v.  State,  124  Geo.  69  (1905) 735 

Townsend  v.  State,  147  Ind.  624;  47  N.  E.  19  (1897) . .  160,  229, 

511,  867 

Train  v.  Boston  Disinfecting  Co.,  144  Mass.  523  (1887) 194 

Transportation  Co.  v.  Chicago,  99  U.  S.  635  (1878) 868 

Travelers  Ins.  Co.  v.  State,  185  U.  S.  364  (1902) 869 

Treadway  v.  C.  S.  &  St.  P.  R.  R.  Co.,  43  la.  527  (1876) 877 

Trunick  v.  Smith,  63  Pa.  St.  18  (1869) 164 

Trustees  v.  Atlanta,  113  Ga.  883  (1901) 114 

Trustees  v.  Bohler,  80  Ga.  159,  163  (1887) 115 

Trustees  Southampton  v.  Jessup,  162  N.  Y.  122  (1900) 584 

Turlock  Irrigation  Dist.  v.  WiUiams,  76  Cal.  360  (1888) 875 

Turnpike  Co.  v.  State,  3  Wall.  210  (1865) 863 

Turpin  V.  Lemon,  187  U.  S.  51  (1902) 865 

Tuthill,  In  re,  163  N.  Y.  133  (1900) 867 

Tyson  v.  State,  28  Md.  577  (1868) 445 

U 

U.  p.  Ry.  Co.  V.  Ruef,  120  Fed.  102  (1902) 883 

Union  Sewer  Pipe  Co.  v.  Connelly,  99  Fed.  354  (1900)  and  184 

U.  S.  540  (1902) 881 

Union  Trust  Co.?;.  Wayne  Probate  Judge,  125  Mich.  487  (1901).  445 

U.  S.  V.  Alexander,  148  U.  S.  186  (1893) 868 

U.  S.  V.  Alger,  62  Fed.  824  (1894) 881,  882 

U.  S.  V.  American  Tobacco  Co.,  221  U.  S.  106  (1911) 881 

U.  S.  V.  Armour  &  Co.,  142  Fed.  808  (1906) 881 

U.  S.  V.  Atchison,  T.  &  St.  F.  Ry.  Co.,  142  Fed.  176  (1905) 881 


TABLE  OF  CASES  xlv 

PAGE 

U.  S.  V.  Cassidy,  67  Fed.  698  (1895)  (Pullman  strike  and  labor 

monopoly) 881 

U.  S.  V.  Clement,  171  Federal  Reporter,  974  (1909) 735 

U.  S.  V.  Debs,  64  Fed.  724  (1894),  and  In  re  Debs,  158  U.  S. 

564 882 

U.  S.  V.  Delaware  &  Hudson  R.  Ry.  Co.,  164  Fed.  215  (1908) . .  879 

U.  S.  V.  Delaware  &  Hudson  Co.,  213  U.  S.  366  (1909) 879 

U.  S.  V.  Elliott  et  al,  62  Fed.  801  (1894),  and  64  Fed.  27. ..... .  882 

U.  S.  V.  Greenhut  et  al,  50  Fed.  469  (1892) 881 

U.  S.  V.  Grimand,  220  U.  S.  506  (1911) 511 

U.  S.  V.  Hoggerty,  116  Fed.  510  (1902) 883 

U.  S.  V.  Jackson,  4  Cranch.  C.  C.  483  (1834) 195 

U.  S.  V.  Jellico  Mt.  Coal  Co.,  46  Fed.  432  (1891) 881 

U.  S.  V.  Joint  Traffic  Ass'n,  171  U.  S.  505  (1898) 880,  881 

U.  S.  V.  Knight  Co.,  156  U.  S.  1  (1895) 881 

U.  S.  V.  McDuell,  5  Cranch.  C.  C.  391  (1838) 195 

U.  S.  V.  Martin,  94  U.  S.  400  (1876) 872 

U.  S.  V.  Nelson,  52  Fed.  646  (1892) 881 

U.  S.  V.  Palmer,  128  U.  S.  262  (1888) 860 

U.  S.  V.  Perkins,  163  U.  S.  625  (1895) 444,  874 

U.  S.  V.  Standard  Oil  Co.  of  Ind.,  155  Fed.  305  (1907) 878 

U.  S.  V.  Sweeney,  95  Fed.  434  (1899) 883 

U.  S.  V.  Trans-Miss.  Freight  Ass'n,  166  U.  S.  290  (1897) .  .880,  881 

U.  S.  V.  Vacuum  Oil  Co.,  158  Fed.  536  (1908) 878 

U.  S.  V.  Webber,  114  Fed.  950  (1902) 883 

U.  S.  V.  Workingmen's  Amal.  Council  of  N.  0.,  54  Fed.  994 

(1893)  and  57  Fed.  85 882 

V 

Vance  v.  Vandercock,  170  U.  S.  438  (1897) 873 

Van  Home  v.  Dorrance,  2  Dall.  304  (1795) 65,  107,  864,  865 

Vegelhan  v.  Guntner  et  al,  167  Mass.  92;  44  N.  E.  1077  (1896).  882 
Vilter  Mfg.  Co.  v.  Humphrey,  112  N.  W.  (Wis.)  1095  (1907).. .  883 

W 

Wabash  Ry.  Co.  v.  Defiance,  167  U.  S.  88  (1897) 878 

Wabash  Ry.  Co.  v.  Haunahan,  121  Fed.  563  (1903) 883 

Wadleigh  v.  Gilman  et  al,  12  Me.  403  (1835) 874 


xlvi  TABLE  OF  CASES 

PAGE 

Walden  v.  Town  of  Whigham,  120  Ga.  646  (1904) 115 

Walker  v.  Sauvient,  92  U.  S.  90  (1875) 865 

Ward  V.  FarweU,  97  111.  593  (1881) 876 

Warren  v.  Sohn,  112  Ind.  213  (1887) 872 

Washington  Bridge  Co.  v.  State,  16  Conn.  53  (1846) 864 

Waters  v.  People,  23  Col.  33  (1896) 195 

Waters  v.  Wolf,  162  Pa.  St.  153;  29  Atl.  646  (1894) 856,  872 

Watkins  v.  Wyatt,  9  Baxter  (Tenn.),  250;  40  Am.  Rep.  90 

(1877) 856 

Weed  V.  Bergh,  141  Wis.  569;  124  N.  W.  664  (1910) 870 

Welch  V.  Swasey,  214  U.  S.  91  (1909);  Same  case,  193  Mass. 

364  (1907) 874 

West  Chicago  St.  Ry.  v.  111.,  201  U.  S.  506  (1906) 866 

West  River  Bridge  Co.  v.  Dix,  6  Howard,  507  (1848) 857,  862 

Westerly  Waterworks  v.  Town  of  Westerly,  75  Fed.  181  (1896)  861 

Western  Nat.  Bank  v.  Reckless,  96  Fed.  70  (1899) 861 

Western  Union  Tel.  Co.  v.  Conn.  Mil.  Co.,  218  U.  S.  406  (1910).  876 

Western  Union  Tel.  Co.  v.  Kansas,  216  U.  S.  1  (1910) 879 

Western  Union  Tel.  Co.  v.  Penn.  R'd,  195  U.  S.  540  (1904).  ...   163 

Wheeler  v.  Irrigation  Co.,  16  Col.  582  (1897) 259 

Whidden  v.  Cheever,  69  N.  H.  142  (1897) 194 

White  V.  Keller,  68  Fed.  796  (1895) 858 

Whitebreast  Fuel  v.  People,  175  111.  51  (1898) 659 

Whiting,  In  re,  150  N.  Y.  27  (1896) 445 

Wick  China  Co.  v.  Brown  et  al,  164  Pa.  449  (1894) 882 

Wilcox  V.  Hawley,  31  N.  Y.  648  (1864) 291 

Wilcox  V.  Hemming,  58  Wis.  144  (1883) 875 

Wilmington  Railroad  v.  Reid,  13  Wall.  264  (1871) 857 

Willcutt  &  Sons  Co.  v.  Bricklayers'  Union,  200  Mass.  110;  85 

N.  E.  897  (1908) 884 

Williams  v.  Arkansas,  217  U.  S.  79  (1910) 870 

WiUiams  v.  Standard  Oil  Co.  of  Minn.,  50  Minn.  290  (1892) ...  870 

Williams  v.  State,  85  Ark.  464;  108  S.  W.  838  (1908) 869 

WilHston  Seminary  v.  Hampshire  Co.,  147  Mass.  427  (1888) . .   857 

Wihnington  Ry.  v.  Reid,  13  Wall.  264  (1871) 864 

Wilshire,  In  re,  103  Fed.  620  (1900) 874 

Wilson  V.  Beckwith,  140  Mo.  359;  41  S.  W.  985  (1897) 857 

Wilson  V.  Harris,  21  Mont.  374  (1898) 106 


TABLE  OF  CASES  xlvii 

PAGE 

Wilson  V.  Hey,  232  III.  389  (1908) 883 

Wilson  V.  Hudson  Water  Co.,  76  (N.  J.)  Atl.  560  (1910) 511 

Wilson  V.  Ward  Lumber  Co.,  67  Fed.  674  (1895) 858,  859 

Wilson  V.  Simpson,  9  Howard,  109  (1849) 713 

Windsor  v.  State,  103  Md.  611;  64  Atl.  288  (1906). ..... .511,  875 

Wisconsin,  M.  &  P.  Ry.  Co.  v.  Jacobson,  179  U.  S.  287  (1900) . .  867 

Woodson  V.  State,  69  Ark.  521  (1901) 639,  659 

Workingmen's  Amalgamated  Council  of  N.  O.  v.  U.  S.,  54  Fed. 

994  and  57  Fed.  85  (1893) 881 

Worthington  v.  Waring,  157  Mass.  421;  32  N.  E.  744  (1892).. .  882 

Wright  V.  Pratt,  31  Wis.  73  (1872) 291 

Wunderle  v.  Wunderle,  144  111.  40  (1893) 874 

Wurtz  V.  Hoagland,  114  U.  S.  606  (1885) 867 

Wyneheimer  v.  People,  13  N.  Y.  378  (1856) 856 

Y 

Yick  Wo  V.  Hopkins,  118  U.  S.  356  (1885) 871 

Young,  Ex  parte,  209  U.  S.  123  (1908) 878 

Z 

Zabriskie  v.  Hackensack  &  N.  Y.  R.  R.,  18  N.  J.  Eq.  178 

(1867) 864 


PROPERTY  AND  CONTRACT  IN  THEIR  RELATIONS 
TO  THE  DISTRIBUTION  OF  WEALTH 


PROPERTY  AND  CONTRACT 

IN  THEIR  RELATION  TO  THE 

DISTRIBUTION  OF  WEALTH 
CHAPTER  I 

DISTRIBUTION   DEFINED   AND   DESCRIBED 

The  term  distribution  is  not  altogether  a  felicitous 
one,  as  in  ordinary  language  it  has  a  variety  of  meanings, 
which  cannot  be  changed  to  suit  the  purposes  of  science, 
important  as  these  purposes  are.  Particularly  does  the 
adjective  distributive  tend  to  confusion  as  it  is  often 
employed  with  the  noun  industries  to  refer  to  move- 
ments of  goods.  But  in  economics,  when  we  discuss  the 
distribution  of  wealth,  we  have  reference  not  to  the  lo- 
cation of  things  but  to  their  ownership.  By  the  distri- 
bution of  wealth  as  a  phase  of  economic  activity  we 
mean  the  assignment  of  goods  for  ownership.  We  deal 
in  distribution  not  with  the  exchange  or  transfer  of 
goods  but  with  the  condition  of  things  following  ex- 
change and  transfer.  In  a  scientific  treatment  of  this 
activity  we  attempt  to  answer  the  question,  In  whose 
hands  do  they  rest  as  property?  Who  has  the  right  to 
consume  them,  to  sell  them,  to  give  them  away?  The 
question  of  property  is  central  and  pivotal  in  modem 

1 


2      PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

distribution,  whether  we  have  reference  to  the  economic 
process,  a  phase  of  economic  activity,  or  to  a  branch 
of  economics,  deahng  with  the  economic  distribution. 
But  ownership  is  not  all-inclusive.  Possession  and  tem- 
porary use  may  constitute  a  part  of  income,  although 
generally  the  use  in  modern  times  would  come  as  a 
result  of  an  expenditure  of  income.  In  earlier  times, 
income  is  less  regularly  the  result  of  an  expenditure  of 
owned  money  incomes. 

Let  us  now  pass  on  to  a  formal  definition.  As  con- 
ceived in  the  present  work  the  distribution  of  wealth, 
or  simply  and  more  conveniently  distribution  may  be 
defined  as  follows:  Distribution  as  a  part  of  economics 
relates  on  the  one  hand  to  the  ultimate  shares  of  accumu- 
lated wealth  and  income-wealth  owned  and  received  by  the 
various  social  units,  and  on  the  other  hand  to  the  shares  of 
income-wealth  assigned  to  the  various  factors  engaged  in 
production:  as  a  preliminary  to  both  orders  of  inquiry  it 
examines  historically  and  critically  the  fundamentals  in 
the  existing  socio-economic  order. '^ 

This  definition  brings  before  us  three  distinct  branches 
of  economic  inquiry.  The  first  of  these  branches  of 
inquiry  relates  to  the  distribution  of  property  ^  and 
income  among  individuals,  or,  to  use  a  more  general 
phrase,  the  various  units  of  the  social  organism.^  We 
here  deal  with  the  question  of  wealth  versus  poverty, 
of  rich  people  and  poor  people,  of  people  in  moder- 
ate circumstances,  etc.  We  ask,  what  are  the  respec- 
tive incomes  of  A,  of  B,  of  C,  and  so  on?  But  it  should 
be  observed  that  we  deal  with  A,  B,  C,  etc.,  as  types  or 
even  groups.    It  would  be  an  endless  task  to  conduct 


DISTRIBUTION  DEFINED  AND  DESCRIBED  3 

an  investigation  of  the  incomes  and  fortunes  of  all  in- 
dividuals. When  histories  of  rich  families  like  the  Fug- 
gers  of  Augsburg  have  been  written  by  scientific  men, 
they  have  looked  upon  these  families  as  having  sig- 
nificance on  account  of  their  great  wealth  and  on  ac- 
count of  the  role  they  played  in  economic  life.  The 
histories  of  such  families  throw  light  on  the  sources  of 
fortunes  as  do  histories  of  individuals  and  families  at 
the  other  end  of  the  scale  on  the  causes  of  poverty.  We 
ask  further,  how  is  the  accumulated  wealth  or  property 
of  the  nation,  or  of  a  part  of  the  nation,  or  eventually 
of  the  world,  divided  among  individuals?  We  deal 
with  units,  ^  whatever  these  may  be,  and  we  ask,  what 
is  their  income?  What  is  their  property?  Why  or  how 
has  A  an  income  of  one  thousand  dollars,  B  an  income 
of  a  million  dollars,  and  C  one  of  two  hundred  and  fifty 
dollars?  How  did  D  become  a  millionaire,  while  the 
total  assets  of  E  would  not  bring  five  hundred  dollars 
at  pubhc  auction?  What  are  the  sources  of  fortunes 
and  incomes?  How  do  they  vary  as  we  pass  from  one 
economic  stage  to  another?  Many  questions  more  or 
less  like  these  arise  in  connection  with  any  serious  in- 
vestigation of  the  distribution  of  property  and  income. 
This  is  frequently  designated  personal  distribution.^ 
And  it  is  the  first  of  the  three  main  lines  of  inquiry 
which  fall  under  distribution. 

But  we  have  to  deal  with  another  line  of  inquiry.  We 
must  inquire  into  the  distribution  of  income-wealth 
among  the  various  factors  or  elements  engaged  in  its 
production,  often  called  product  distribution.  Here 
we  do  not  consider  the  incomes  of  A,  B,  and  C,  but  we 


4      PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

examine  into  that  part  of  the  total  wealth  produced 
which  is  to  be  attributed  or  imputed  to  land,  to  labour, 
to  capital,  to  entrepreneurial  ability,  and  to  any  other 
categories  into  which  this  total  available  wealth  may 
be  divided.  We  deal  with  something  different  in  many 
respects  from  the  incomes  of  individuals,  and  we  are 
not  concerned  so  directly  with  questions  of  ownership. 
We  deal  with  imputation  or  assignment  of  income  to 
a  class,  finally  reaching  its  members  and  passing  into 
their  ownership.  We  do  not  ask,  What  is  the  income 
of  wage-earner  A  or  of  capitalist  B?  But  we  ask  the 
quite  different  question,  What  part  goes  to  wages? 
what  part  to  rent?  what  part  is  set  aside  as  interest? 
and  so  on.  Now  it  may  well  happen  that  some  par- 
ticular capitalist,  say  B,  is  receiving  an  increasing  in- 
come, although  the  total  share  which  goes  to  capital 
may  be  decreasing.  So,  on  the  other  hand,  the  general 
share  of  labour  as  a  whole  may  be  increasing  and  yet 
some  particular  labourer,  say  F,  may  be  receiving  less 
and  less  because  of  an  increase  in  the  number  of  wage- 
earners,  while  all  the  time  a  larger  share  of  the  product 
may  go  to  labour  as  a  whole  than  ever  before.  And 
from  this  follows  an  important  conclusion.  We  do  not 
know  how  the  individual  wage-earner  fares  when  we 
know  how  much  of  the  total  wealth  production  goes  to 
wages.  The  two  things  are  distinct,  and  an  inquiry  into 
the  one  does  not  of  necessity  afford  information  about 
the  other.  Simple  and  obvious  as  this  seems,  it  is  very 
important,  and  it  is  something  that  appears  to  have 
been  overlooked  frequently.  We  want  to  know  not 
only  how  great  has  been  the  share  of  the  "riches  annu- 


DISTRIBUTION  DEFINED  AND  DESCRIBED  5 

ally  produced"  which  goes  to  labour,  but  we  desire 
still  more  to  know  how  the  individual  wage-earner 
fares  in  his  income. 

In  this  second  line  of  inquiry  we  are  concerned  with 
income  distribution.  Labour  as  such  cannot  be  said 
to  have  property,  nor  can  we  assign  any  proportion  or 
amount  of  accumulated  wealth  to  land  or  capital.  Only 
shares  of  income-wealth  are  assignable  to  the  factors 
in  production  as  such.  We  can,  on  the  other  hand,  ask 
what  share  of  wealth  belongs  to  wage-earners.  But 
not  all  of  this  has  come  to  them  from  savings  out  of 
labour  earnings.  Wage-earners  have  received  more  or 
less  from  gift  and  inheritance,  and  in  many  parts  of  the 
world  they  have,  altogether  apart  from  wages,  partici- 
pated with  others  in  the  gains  of  increasing  prosperity. 

The  third  line  of  inquiry  indicated  by  our  definition 
of  distribution  is  concerned  with  the  underlying  eco- 
nomic institutions  upon  which  our  whole  economic 
structure  rests.  The  fundamentals  have  been  much 
neglected  by  English  and  American  economists,  who 
until  recently  were  inclined  to  restrict  distribution  as  a 
part  of  economics  to  our  second  line  of  inquiry  alone. ^ 
While  these  writers  are  broadening  the  field  of  econom- 
ics, the  German  economists  have  long  included  the 
fundamentals  within  the  scope  of  economics  and 
treated  at  least  some  of  them  with  praiseworthy  thor- 
oughness, although  even  these  scholars  have  given  us 
comparatively  little  of  a  systematic  nature  about  indi- 
vidual fortunes.'^  Private  property  has  been  treated 
more  fully  than  any  other  fundamental.  And  in  this 
connection  all  scholars  will  think  of  the  distinguished 


6       PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

veteran  German  economist,  Professor  Adolf  Wagner, 
and  of  his  monumental  but  only  partially  finished  work 
on  the  whole  field  of  economics,  of  which  the  first  part, 
called  Grundlegung  (Foundation-laying),  deals  espe- 
cially with  this  fundamental.^ 


Notes  and  References  to  Chapter  I 

1  P.  2.  The  term  socio-economic  order  is  frequently  abbreviated 
into  social  order,  because  the  fundamentals  of  the  socio-economic 
order  are  such  a  large  part  of  our  entire  social  order.  But  this  is  a 
procedure  more  convenient  than  accurate,  and  the  distinction  be- 
tween the  entire  social  order  and  any  part  of  it  must  always  be  kept 
clearly  in  mind. 

2  P.  2.  Property  is  used  as  equivalent  to  accumulated  economic 
goods  of  all  kinds,  such  as  the  census  of  the  United  States  takes  note 
of  in  giving  estimates  of  the  wealth  of  the  country.  This  is  a  popular 
and  convenient  use  of  the  term  and  avoids  long  and  tedious  phrases 
and  terms  such  as  "accumulated  economic  goods."  Strictly  speak- 
ing, as  is  pointed  out  later  on,  property  is  a  right  in  economic  goods 
and  we  have  property  in  income  as  well  as  in  land  and  in  capital. 
It  will  be  endeavoured  to  use  this  term  "property"  so  as  not  to  lead 
to  confusion,  and  it  will  doubtless  be  evident  when  this  term  is  em- 
ployed in  a  strict  and  narrow  sense,  as  well  as  in  a  popular  sense,  for 
example,  in  the  phrase  "property  and  income."  The  word  "wealth" 
without  any  prefix  is  a  convenient  term  for  accumulated  wealth  or 
property,  as  property  is  employed  in  the  last  sentence,  and  will  be 
so  employed  at  times  when  no  confusion  is  likely  to  result  therefrom. 

'  P.  2.  The  use  of  the  term  organism  here  does  not  mean  the 
adoption  of  any  particular  theory  of  the  origin  and  nature  of  human 
society,  a  subject  much  discussed  by  sociologists.  We  here  and  now 
simply  accept  the  fact  that  men  are  united  into  society  with  a  multi- 
plicity of  relations  to  each  other  and  that  it  is  convenient  to  use  this 
term  organism  as  pointing  to  this  unity  which  has  its  resemblances 
to  as  well  as  its  still  more  marked  differences  from  an  organism  like 
a  plant  or  a  human  body.  See  an  able  treatment  of  this  subject  by 
Professor  L.  H.  Haney  in  his  article  "The  Social  Point  of  View  in 
Economics,"  Quarterly  Journal  of  Economics  for  November,  1913 
(Vol.  XXVIII,  No.  1). 

^  P.  3.  We  have  many  different  units,  depending  upon  the  nature 
and  purpose  of  our  particular  inquiry.  Sometimes  we  are  concerned 
with  families,  sometimes  with  private  corporations,  more  generally 
with  the  individual  human  being. 

7 


8       PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

^  P.  3.  Personal  is  here  used  in  the  legal  sense,  meaning  any  legal 
entity,  as  employed  in  the  decisions  of  the  courts  of  the  United 
States  in  interpreting  the  Fourteenth  Amendment  of  the  Constitu- 
tion of  the  United  States,  which  protects  property  and  person 
against  invasion  by  state  action. 

*  P.  5.  The  author  was  frequently  criticised  a  few  years  ago  for 
an  alleged  undue  enlargement  of  the  scope  of  economics,  because  he 
included  these  lines  of  inquiry  within  economics.  The  more  recent 
treatises,  however,  generally  have  at  least  a  brief  treatment  of  all 
three  lines  of  inquiry,  or,  at  any  rate,  enough  about  them  to  imply 
an  admission  that  they  fall  within  the  scope  of  economics. 

^  P.  5.  Professor  Richard  Ehrenberg,  of  the  University  of  Rostock, 
has  done  something  in  this  field.  See  his  work,  Grosse  Vermogen, 
ihre  Entstehung  unci  ihre  Bedeutung.  2  vols. 

8  P.  6.  Lehr  und  Handbuch  der  politischen  Oekonomie,  3d  ed. 
Leipzig,  1892,  1894.  The  first  two  parts  consist  of  the  following 
divisions : 

Grundlegung   der   politischen   Oekonomie. 

Erster  Teil.    Die  Grundlagen  der  Volkswirtschaft. 

Erstes  Buch.    Die  wirtschaftUche  Natur  des  Menschen. 
Object.    Aufgaben.    Methoden.    System  der  politischen  Oe- 
konomie. 
Zweites  Buch.     Elementare  Grundbegriffe. 
Drittes  Buch.    Wirtschaft  und  Volkswirtschaft. 
Viertes  Buch.    Bevolkerung  und  Volkswirtschaft. 
Fiinftes  Buch.    Die  Organisation  der  Volkswirtschaft. 
Sechstes  Buch.     Der  Staat,  volkswirtschaftlich  betrachtet. 
Zweiter  Teil.    Volkswirtschaft  und  Recht,  besonders  Vermii- 
gensrecht    oder    Freiheit    und    Eigentum    in   volkswirt- 
schaftlicher  Betrachtung. 
Erstes  Buch.    Einleitung.    Pers5nliche  Freiheit  in  volkswirt- 

schaftlicher  Betrachtung.    Unfreiheit  und  Freiheit. 
Zweites  Buch.     Die  Eigentumsordnung  in  volkswirtschaft- 
licher  Betrachtung.     Einleitung,  Begriindung  und  Be- 
griff  des  Privateigentums. 
Drittes  Buch.    Die  Ausdehnung  des  Privateigentums. 


CHAPTER  II 

THE   FORCES   IN   DISTRIBUTION 

The  forces  which  are  at  work  in  distribution  are 
manifold  in  character  and  it  is  well  in  this  introduction 
to  speak  about  some  of  these,  as  the  differences  among 
them  must  be  held  clearly  in  mind  if  we  would  under- 
stand our  subject  in  some  of  its  essential  features.  One 
of  the  most  important  distinctions  to  be  made  in  the 
treatment  of  these  forces  is  between  those  that  are  in- 
dividual and  those  that  are  social  and  almost  equally 
significant  is  the  distinction  between  conscious  and 
unconscious  forces.  The  terms,  conscious  and  uncon- 
scious, are  here  used  in  a  restricted  and  technical 
sense  ^  which  requires  a  few  words  of  explanation. 

By  conscious  efforts  of  individuals  we  mean  efforts  of 
which  they  are  conscious  with  respect  to  the  particular 
end  now  under  consideration,  namely,  the  acquisition  of 
wealth.  One  may  or  may  not  make  a  conscious  effort 
to  accumulate  wealth.  If  I  make  such  a  conscious  effort, 
the  income  or  property  which  results  therefrom  is  due 
to  conscious  processes.  As  a  matter  of  fact,  the  dis- 
tribution of  wealth  among  individuals  is  largely  the 
result  of  conscious  effort,  but  by  no  means  wholly  so. 
Notice,  first,  that  our  activities  which  have  no  conscious 
reference  to  wealth-getting,  nevertheless  have  a  tre- 
mendous influence  upon  our  economic  situation.     An 

9 


10    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

obedient,  diligent,  faithful  son  of  fourteen  or  fifteen  years 
of  age  doubtless  rarely  thinks  of  his  obedience,  diligence 
and  faithfulness  with  reference  to  their  economic  value. 
But  his  efforts,  although  from  our  particular  point  of 
view  unconscious,  have  their  effects  on  his  wealth  ac- 
quisition. Similarly  a  mature  man  may  make  a  con- 
scious effort  to  put  his  Ufe  on  a  higher  ethical  plane, 
practising  temperance  instead  of  intemperance,  etc. ;  he 
may  have  no  conscious  economic  goal  in  this  effort  at 
self-reformation,  although  as  a  matter  of  fact  his  in- 
come may  be  doubled  in  consequence.  Innumerable 
illustrations  of  this  character  will  occur  to  the  reader. 

In  the  second  place,  the  income  of  individuals  de-^ 
pends  to  a  very  large  and  ever  increasing  extent  upon 
the  conscious  efforts  of  society.  In  our  own  day  society 
is  awakening  to  a  consciousness  which  is  something  new 
in  its  history.  Social  self-consciousness  is  one  of  the 
great  forces  in  wealth  distribution,  and  in  its  growth 
and  development  is  to  be  found  one  of  the  prime  causes 
of  those  movements  of  our  own  time  which  aim  at  bet- 
tering economic  conditions. 

Perhaps  the  expression  social  self-consciousness  or  the 
self-consciousness  of  society  calls  for  some  elucidation. 
We  know  very  well  what  we  mean  by  the  self -conscious- 
ness of  an  individual,  and  we  have  considered  its  mean- 
ing with  respect  to  the  distribution  of  wealth ;  but  what 
do  we  mean  by  the  self-consciousness  of  society?  The 
question  really  belongs  to  sociology  rather  than  to  eco- 
nomics and  we  have  no  desire  to  enter  into  refinements 
which  are  not  called  for  by  our  present  task.  Observa- 
tion and  reflection  show  us  clearly  that  there  is  such  a 


THE  FORCES  IN  DISTRIBUTION  11 

thing  as  a  consciousness  of  society  distinct  and  different 
in  nature  from  the  consciousness  of  the  individuals  who 
compose  it.^  Nor  is  this  idea  of  the  consciousness  of 
society  difficult  to  grasp.  As  a  society  our  will  finds  one 
avenue  of  expression  through  legislation,  and  not  only 
does  our  will  find  expression  in  this  way  but  such  ex- 
pression is  normally  and  regularly  followed  by  action, 
in  which  other  social  agents,  judicial  and  executive, 
appear.  No  individual  in  the  United  States  may  say 
of  a  law  passed  by  Congress,  'That  is  my  will.'  It  is 
the  expression  not  of  any  particular  individual,  but  of  a 
collectivity,  of  society  at  large. 

Society  expresses  its  will  through  government,  but  it 
does  so  also  outside  the  sphere  of  government.  Govern- 
ment is  only  one  of  the  avenues  through  which  society 
finds  self-expression  and  this  particular  self-expression 
is  a  public  expression,  using  the  term  public  here  as  an 
adjective  corresponding  to  our  word  state,  when  state 
is  employed  in  its  generic  sense  to  mean  organised  po- 
litical society.^  Social  action  expresses  itself  through 
public  opinion  which  when  thoroughly  aroused  is  almost 
all-powerful;  it  then  enforces  the  social  will  through 
many  different  channels,  condemning  some  actions,  ap- 
plauding others,  punishing  those  persons  it  dislikes 
and  rewarding  those  of  whom  it  approves.  We  have 
also  organised  private  social  efforts,  embracing  more  or 
less  large  and  numerous  sections  or  classes  of  society. 
Labour  organisations  and  manufacturers'  associations 
are  avenues  of  social  forces.  Consumers '  leagues  afford 
an  illustration  of  innumerable  organisations  through 
which  social  forces  seek  to  modify  economic  processes. 


12    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Religious  bodies  also  play  their  part  as  social  forces 
and  occupy  a  large  place  in  human  history. 

We  have  in  our  day  a  two-fold  movement  which 
must  be  considered  in  this  connection;  first,  a  weaken- 
ing of  the  old  classes  based  on  political  privilege  and 
established  by  positive  statute  and  long  continued  cus- 
tom; second,  a  growth  of  economic  classes,  and  es- 
pecially the  emergence  of  rather  sharply  defined  classes 
of  employers  and  employees,  each  with  a  menacing  class- 
consciousness.  The  word  ' '  class-conscious ' '  has  played, 
and  is  still  playing  a  great  role  in  socialist  agitation. 

But  most  significant  to-day  is  the  growing,  develop- 
ing, powerfully  increasing  self-consciousness  of  political 
society — of  the  state  as  such.  -  It  has  come  to  be  the 
opinion  of  this  society,  expressed  through  its  organs, 
that  certain  of  its  economic  units  do  not  have  sufficient 
incomes  for  the  satisfaction  of  real  needs.  We  may 
mention,  for  example,  the  individuals  employed  in  the 
sweat  shops.  Society  sets  about  to  raise  the  income  of 
those  so  employed.  Governmental  activity  is,  to  be 
sure,  only  one  of  the  social  methods  employed,  but  con- 
sumers '  leagues  and  other  organisations  sooner  or  later 
ask  for  state  aid  in  their  efforts. 

But  there  are  also  unconscious  social  forces  at  work 
in  distribution;  and  by  unconscious  forces,  as  we  have 
just  seen,  we  mean  those  in  which  there  is  no  conscious 
effort  to  modify  distribution,  but  in  which  the  conscious- 
ness is  directed  towards  other  ends.  Nowadays,  how- 
ever, our  minds  are  so  continuously  directed  towards 
questions  of  distribution,  of  wealth  and  poverty,  etc., 
that  hardly  any  important  action  of  organised  political 


THE  FORCES  IN  DISTRIBUTION  13 

society  is  likely  to  be  considered  totally  without  ref- 
erence to  its  possible  consequences  in  distribution. 
But  we  have  social  actions  in  which  other  considerations 
are  dominant;  and  in  earlier  times,  social  activity  was 
far  less  a  conscious  activity.  Law  and  order  have  been 
established  and  maintained  as  necessities  of  social  co- 
existence, as  conditions  of  general  prosperity  and  not 
with  reference  to  the  promotion  of  any  particular  sort 
of  distribution.  Yet  they  represent  social  forces  in 
distribution.  The  good  enforcement  of  law  and  order 
has  its  effect  on  the  income  of  individuals,  but  that 
effect  is  incidental.  The  law  may  be  well  enforced  in 
one  part  of  the  country  and  loosely  in  another,  and  the 
difference  in  the  enforcement  of  the  law  of  the  land  will 
modify  the  distribution  of  wealth  among  the  individual 
members  of  society,  even  if  the  result  is  not  aimed  at  nor 
even  considered.  But  even  here  economic  influences 
are  more  and  more  frequently  thought  of;  and  a  demand 
for  the  enforcement  of  law  and  order  may  exist  as  a  re- 
sult of  the  observation  of  the  disastrous  economic  con- 
sequences of  lawlessness. 

The  relation  between  conscious  and  unconscious  or 
spontaneously  operating  social  forces  is  not  a  fixed  one 
but  is  variable  and  changing  from  time  to  time  and 
from  land  to  land.  Nevertheless,  it  is  a  safe  generalisa- 
tion to  say  that  with  the  development  of  civilisation, 
particularly  of  civilisation  on  its  economic  side,  so- 
cial self-consciousness  continually  wins  new  fields  and 
gains  on  the  unconsciously  operating  social  forces.  This 
is  a  necessary  consequence  of  the  extension  of  the  divi- 
sion of  labour,  the  increasing  part  played  by  exchange 


14     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  widening  markets,  all  meaning  new  and  more  force- 
ful economic  ties,  welding  us  all  together  more  and  more 
firmly;  our  local  economic  units  growing  into  national 
economies  and  these  in  our  own  day  gradually  develop- 
ing into  what  may  be  designated  as  a  qualified  world 
economy;  not  a  world  economy  from  which  sectional- 
ism and  nationalism  will  ever  disappear  but  something 
superposed  on  all  the  economies. 

We  may  take  up  the  three  branches  or  lines  of  inquiry 
with  which  we  are  concerned  in  the  distribution  of 
wealth  and  examine  them,  one  by  one,  with  reference 
to  the  role  of  conscious  social  forces  as  contrasted  with 
the  part  played  by  unconsciously  or  spontaneously 
operating  social  forces.  Although  in  each  one  of  these 
fields  action  for  predetermined  ends  grows  continuously 
more  marked,  we  notice  differences.  More  and  more  do 
we  find  a  conscious  modification  of  income  distribution. 
We  have  the  incomes  which  come  to  us  partly  because 
we  work  for  them,  in  part  also  we  have  them  because 
society  has  decided  that  we  should  have  them,  and  not 
infrequently  we  have  them  because  certain  social  forces, 
operating  more  or  less  unconsciously,  have  cooperated 
with  our  own  efforts  to  secure  them,  or  have  even  pro- 
cured them  for  us  without  any  efforts  on  our  part. 
Such  social  forces  are  more  particularly  those  which 
exist  embodied  in  the  institutions  of  society.  Changes 
in  property-values  brought  about  through  natural 
movements  of  population  afford  one  illustration.  The 
institution  of  inheritance  serves  as  another  illustration. 

We  pass  now  to  product-distribution.  How  is  this 
effected?    The  first  fact  to  be  noted  is  that  it  is  brought 


THE  FORCES  IN  DISTRIBUTION  15 

about  chiefly  through  the  operation  of  unconscious  so- 
cial forces;  that  is  to  say,  by  those  forces  which  operate 
through  institutions.  The  state  here  interferes  for  the 
most  part  only  in  a  general  way  to  modify  and  give 
shape  to  distribution  among  the  factors  in  the  produc- 
tion of  wealth  (land,  labour,  capital,  and  enterprise). 

Besides  the  unconscious  social  forces  above  men- 
tioned we  meet  with  self-conscious  social  activities  by 
which  it  is  designed  to  modify  product-distribution. 
Of  these  the  protective  tariff  may  be  cited  as  an  exam- 
ple. Without  asking  at  this  time  whether  a  protective 
tariff  is  good  or  not,  it  is  certain  that  one  of  its  avowed 
aims  is  to  increase  the  product  which  goes  to  labour,  and 
thus  to  modify  by  a  deliberate  social  effort  the  distribu- 
tion of  wealth.  Its  aim  is  to  increase  wages,  absolutely 
and  relatively.  Similarly,  there  is  a  conscious  social 
effort  in  the  attempt  to  limit  the  share  of  capital  through 
usury  laws,  although  this  attempt  may  fail  of  its  object, 
as  may  the  protective  tariff.  We  have  in  both  cases  to 
do  with  deliberate  efforts  on  the  part  of  society  at  large 
to  interfere  with  the  product-distribution  among  the 
various  factors  which  produce  it.  But  the  effect  is 
general,  not  particular.  Usury  laws  of  the  old  Amer- 
ican kind,  for  example,  do  not  aim  at  lessening  the  in- 
come of  capitalist  A  or  D  or  G,  but,  by  fixing  a  definite 
rate  of  interest,  for  example  six  per  cent,  in  New  York 
State,  they  seek  more  or  less  successfully  to  set  certain 
limits  to  the  share  which  goes  to  capital  as  a  whole  or 
to  capitalists  as  a  class.  The  same  is  true  of  the  pro- 
tective tariff;  it  is  designed  to  affect  not  individuals,  but 
classes. 


16    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

But  by  the  side  of  these  public  social  forces,  we  find 
private  social  efforts,  such,  for  example,  as  those  of 
labour  organisations.  Their  aim  is  to  increase  the  share 
of  the  product  which  shall  go  to  labour.  They  make 
conscious  attempts  to  modify  distribution  in  the  in- 
terest of  those  whom  they  represent.  Or,  to  express 
ourselves  differently,  the  individuals  who  compose  so- 
ciety become  more  closely  interrelated  and  more  con- 
scious of  interdependence  and  act  accordingly.  We 
have  called  such  action  as  that  here  described  a  self- 
conscious  expression  of  society;  and  this  convenient 
terminology  may  be  employed  without  any  implication 
of  assent,  or  for  that  matter  of  dissent,  with  respect  to 
the  idea  that  there  exists  a  social  mind,  as  an  entity 
apart  from  individuals.^  We  have  no  desire  to  enter 
into  this  sociological  question. 

Passing  over  to  an  examination  of  the  fundamentals 
in  the  existing  socio-economic  order,  the  first  truth  to 
note  is  that  they  are  established  not  by  individuals, 
nor  by  nature,  but  by  human  society.  Society  displays 
an  ever  clearer  conception  of  purpose  as  it  goes  on  in  its 
development.  Its  action  becomes  more  and  more  pur- 
posive, more  and  more  deliberate. 

The  various  underlying  institutions  which  make  up 
the  organisation  of  society  are  the  media,  through  which 
operate  the  social  forces  that  largely  shape  and  modify 
the  distribution  of  wealth.  But  while  it  was  not  for  that 
purpose  that  they  were  instituted,  society  not  originally 
intending  nor  consciously  aiming  at  such  influence  as  is 
exerted  in  this  direction,  it  is  to  be  emphasised  that  even 
in  the  fundamentals  the  conscious  efforts  of  society 


THE  FORCES  IN  DISTRIBUTION  17 

are  more  and  more  directed  towards  a  desired  distri- 
bution. A  great  movement  for  regulating  the  modes  of 
acquiring  private  property  is  sweeping  over  the  world. 
This  will  later  occupy  our  attention.  We  may  in  pass- 
ing, however,  notice  the  taxation  of  property  as  it  passes 
from  generation  to  generation,  which  as  a  matter  of 
fact,  whether  a  good  thing  or  a  bad  thing,  is  beyond  all 
question  being  shaped  with  reference  to  what  is  held 
to  be  a  more  equitable  and  presumably  a  more  desirable 
distribution  of  wealth. 


$ 


Notes  and  References  to  Chapter  II 

1  P.  9.  Even  our  conscious  efforts  are  socially  controlled  in  a 
very  real  sense.  Through  imitation,  socially  habituated  modes  of 
activity  in  wealth-getting  and  wealth-using  are  dominant.  Into 
this  truth  we  need  not  enter  further  here  and  now. 

2  P.  11.  This  social  self -consciousness  is  something  that  cannot 
be  attained  by  any  process  of  addition;  it  is  a  resultant  of  many 
forces.  As  used  in  the  present  work  it  need  not  occasion  difficulty. 
No  metaphysical  differentiation  or  explanation  is  called  for  in  this 
connection.  We  are  discussing^feal  and  vital  forces  for  which  we 
need  terms,  and  those  conveniS^and  most  readily  understood  are 
chosen.  ^ 

'  P.  11.  It  corresponds  to  the  German  words  bffmtlich  and  staat- 
lich.  The  fact  that  we  use  the  word  state  in  its  generic  sense  and  also 
to  mean  one  of  our  separate  commonwealths  going  to  make  up  our 
one  American  state  leads  to  a  good  deal  of  confusion  in  thought,  aad 
perhaps  also  in  action.  It  is  unfortunate,  also,  that  we  do  not  hai^ 
an  adjective  corresponding  precisely  to  state.  We  think  of  stately, 
but  that  has  acquired  such  a  thoroughly  different  meaning  that 
we  cannot  employ  it  in  the  sense  with  which  we  are  concerned.  We 
use  then  the  term  public  here  in  the  sense  indicated,  as  an  adjec- 
tive corresponding  to  state  in  the  generic  sense.  In  the  next  sen- 
tence again  the  word  public,  as  employed  in  public  opinion,  has  a 
larger  and  more  general  meaning. 

^  P.  16.  See  again  Professor  Haney's  article,  "The  Social  Point 
of  View  in  Economics,"  Quarterly  Journal  of  Economics,  Novem- 
ber, 1913.  Excellent  as  the  article  is,  perhaps  possible  dangers 
of  error  of  this  kind  are  treated  more  seriously  than  is  at  present 
necessary. 

18 


CHAPTER  III 

WEALTH   AND   ITS   KINDS.      PRODUCTION   AND    DISTRIBU- 
TION.     STATICS  AND  DYNAMICS   OF  DISTRIBUTION 

In  distribution  we  deal  with  the  concept  wealth. 
This  concept  will  receive  further  elucidation  as  we  pro- 
gress in  our  studies,  but  we  raust  pay  a-t  least  some  atten- 
tion to  it  at  this  point.  The  Word  wealth  originally  was 
weal,  or  that  which  produced  well-being.  From  this 
earljer  form  tlie  word  was  lengthened  to  wealth ;  but  the 
old  meaning  of  the  word  is  still  preserved  in  the  Book 
of  Common  Prayer  of  the  English  Church,  where  the 
people  are  instructed  to  pray  for  the  ''wealth"  of  the 
king.  As  the  weal  of  society  and  individuals  depends 
so  largely  on  their  economic  weal,  it  is  the  latter  alone 
which  has  come  to  be  thought  of  by  economists  when 
the  word  wealth  is  employed.^  But  for  some  purposes 
we  may  still  employ  the  term  wealth  in  a  sense  very 
nearly  as  inclusive  as  weal.  This  usage  is  exemplified 
in  the  term  social  wealth,  when  employed  in  its  largest 
and  broadest  sense;  for  it  then  means  all  those  goods 
which  contribute  to  the  weal,  and  especially  the  mate- 
rial weal,  of  society.  Climate,  beautiful  scenery,  as  well 
as  fertile  lands,  would  be  included.  One  reason  for  this 
inclusive  use  of  the  term  social  wealth  is  that  the  term 
exchange  value  has  less  significance  for  society  as  a 
whole  than  for  individuals.    At  the  same  time,  it  must 

19 


20    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

be  confessed  that  the  term  is  somewhat  vague  and 
social  wealth  thus  conceived  is  incapable  of  measure- 
ment. As  a  whole  it  can  be  described  in  general  terms 
only.  Social  wealth,  then,  means  quantities  of  goods, 
both  free  goods  and  economic  goods.  Free  goods  are 
open  to  all.  By  economic  goods,  on  the  other  hand,  we 
mean  goods  which  generally  have  exchange  value  and 
which  generally  are  procured  by  laborious  exertion. 
They  are  goods  so  limited  quantitatively  that  they  do 
not  satisfy  all  human  wants.  Normally  and  regularly 
they  have  exchange  value;  but  valuable  objects  may  be 

^;  removed  from  the  active  and  normal  sphere  of  exchange- 
's ■  '  *  "1 

'economy,  for  exarii'ple,  public,  ^puildings,  old  world  ca- 
thedrals. 

Economic  wealth  is  restricted  to  economic  goods. 
Economic  goods  are  sometimes  conceived  of  as  simply 
a  store  or  stock  of  material  things,  but  it  is  more  con- 
venient in  economics  to  follow  the  traditional  usage 
and  let  them  include  services  as  well;  and  then  to  regard 
wealth  from  the  two  points  of  view,  wealth  as  an  accu-  j 
mulated  supply  of  goods  and  wealth  as  a  flow  or  income. 
It  is  said  truly  that  material  goods  render  services, 
but  we  can  avoid  confusion  by  employing  the  term 
personal  services.  We  thus  speak  of  economic  wealth  as 
comprising  commoditjes  and  personal_services  and  make 
a  distinction  of  legal  and  economic  significance.  The 
distinction  is  an  important  one  and  should  be  carefullj'' 
remembered.  Not  a  few  economists  have  made  the 
mistake  of  confining  the  term  wealth  to  material  things. 
But  there  is  no  hard  and  fast  line  between  commodities 
and  services.    This  subject  has  been  presented  admira- 


WEALTH  AND  ITS  KINDS  21 

bly  by  Senior.  He  calls  attention  to  the  fact  that  of- 
ten the  distinction  between  the  terms  commodity  and 
service  is  only  a  question  of  the  point  of  view  we 
take.  \^nior  says  that  when  we  fasten  our  attention, 
upon  the  act  itself,  we  call  the  economic  good  in  ques- 
tion a  service;  if  on  the  result  of  the  act,  we  call  it  a 
commodity.  As  an  illustration  he  mentions  the  physi- 
cian who  is  said  to  render  a  service,  and  the  druggist 
who"  is  said  to  produce  a  commodity.  The  shoemaker, 
says  Senior,  furnishes  a  commodity,  but  the  bootblack 
renders  a  service;  yet  both  have  merely  changed  the 
position  of  things.  The  difference  in  these  and  many 
other  cases  is  in  the  point  of  view.  If  we  want  to  speak 
with  absolute  exactitude,  we  may  say  that  the  shoe- 
maker renders  a  service  in  making  us  shoes,  just  as  the 
bootblack  renders  a  service,  for  the  leather,  the  shoe, 
the  blacking,  and  the  blackened  shoe  are  all  material 
things  and  things  produced  by  human  effort.  Yet  in 
economics  as  in  law  we  base  many  useful  distinctions 
upon  different  points  of  view.^ 

The  word  wealth  has  also  other  meanings;  for  ex- 
ample, it  may  mean  opulence  as  well  as  economic  goods. ' 
The  important  distinction  between  wealth  as  a  stock 
and  wealth  as  income  has  already  been  mentioned. 
Both  concepts  are  often  expressed  by  the  simple  term 
wealth. 

John  Stuart  Mill,  in  his  Essays  on  Some  Unsettled 
Questions  of  Political  Economy,  made  permanency  an 
essential  test  in  his  concept  wealth,  saying,  ''the  wealth 
of  a  country  consists  of  the  sum  total  of  the  permanent 
sources  of  enjoyment,  whether  material  or  immaterial, 


22    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

contained  in  it."  ^  Here  wealth  is  on  the  one  hand, 
widened  out  to  include  permanent  sources  of  enjoy- 
ment, whether  these  have  economic  value  or  not  and, 
on  the  other,  contracted  by  the  idea  of  permanency,  a 
relative  concept.  Evidently  Mill  had  in  mind  here 
accumulated  wealth  rather  than  income-wealth,  which 
so  frequently  perishes  in  the  using. 

These  distinctions  must  be  borne  in  mind  in  studying 
the  various  writers  on  the  subject.  Does  the  author  in 
question  mean  economic  goods?  does  he  mean  well- 
being?  or  is  he  talking  about  opulence?  Does  he  mean 
accumulated  wealth,  or  is  he  discussing  incomes?  To 
read  the  one  meaning,  when  as  a  matter  of  fact  the 
writer  means  some  other,  will  often  lead  to  great  con- 
fusion and  superfluous  criticism. 

In  statistics  wealth  usually  means  wealth  considered 
as  a  stock  or  accumulated  supply  of  wealth  existing  at 
a  certain  time,^  while  economists  more  generally  mean 
income,  especially  when  speaking  of  the  distribution  of 
wealth.  Quesnay,  for  example,  often  speaks  of  annual 
income  (richesses  annuelles).  So  does  Adam  Smith 
in  his  Wealth  of  Nations.  They  mean  whp,t  is  annually 
produced.  The  usual  meaning  of  the  term  varies  in  dif- 
ferent countries.  In  the  United  States  the  prevailing 
meaning  is  accumulated  wealth,  due  in  part  to  the  fact 
that  the  American  tax  system  is  based  largely  on  accu- 
mulated wealth,  while  in  foreign  countries  it  is  based 
mainly  on  annual  yield  and  income;  therefore  in  Eng- 
land and  in  Europe  generally  wealth  frequently  means 
annual  income.  It  is  the  wealth  as  income  which  is  of 
more  importance. 


WEALTH  AND  ITS  KINDS  23 

We  may  now  glance  at  certain  other  distinctions, 
although  most  of  them  need  not  detain  us  long.  We 
distinguish  between  social  wealth  in  its  broadest  sense 
and  social  wealth  in  its  narrower  sense  of  economic 
wealth.  The  latter  is  the  usual  meaning  in  economics 
and  is  to  be  taken  as  the  meaning  intended  in  this  work 
unless  the  contrary  is  indicated. 

Another  distinction  often  made  is  between  social 
wealth  in  the  narrower  sense  and  private  wealth.  In 
this  work  we  are  dealing  with  social  wealth,  in  the  nar- 
row sense  of  either  an  accumulated  stock  of  economic 
goods  or  a  flow  of  such  goods  as  income,  and  also  with 
private  wealth.  The  two  are  not  by  any  means  the 
same  thing.  Private  wealth  means  economic  goods 
which  yield  utilities  to  the  individual,  and  it  may  even 
mean  something  which  detracts  from  social  wealth.  For 
example,  a  man,  who  owns  and  operates  a  lottery  and 
grows  rich  thereby  does  not  add  to  the  social  wealth. 
He  may  be  growing  richer  while  others,  and  even  society 
at  large,  are  growing  poorer.  But  private  wealth  also 
includes  perfectly  legitimate  and  proper  claims  on 
others,  of  which  the  mortgage  furnishes  a  typical  ex- 
ample. Annihilate  the  mortgage  and  society  is  neither 
richer  nor  poorer;  what  the  one  person  loses  the  other 
gains.  Private  wealth  is  a  concept  which  belongs  pri- 
marily to  a  discussion  of  individual  distribution,  while 
social  wealth  is  a  concept  which  receives  special  em- 
phasis in  production.  This  is  a  distinction  upon  which 
Lauderdale  has  dwelt  at  length  in  his  work  on  Public 
Wealth,  in  which  he  distinguishes  between  public 
wealth  and  private  riches.    Chapter  II  of  his  book  dis- 


24    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

cusses  public  wealth  and  individual  riches  and  the  re- 
lation which  they  bear  to  each  other.  J.  B.  Say,  Sis- 
mondi  and  French  writers  generally  make  this  distinc- 
tion as  does  Daniel  Raymond  in  the  United  States. 
In  Hadley's  Economics,  in  Chapter  I  dealing  with  '^  Pub- 
lic and  Private  Wealth"  public  wealth  is  used  as  the 
equivalent  of  our  social  wealth  in  its  large  and  inclusive 
sense. 

Still  another  confusion  of  terms,  or  rather  of  different 
meanings  of  the  same  term,  must  be  carefully  avoided. 
'  We  must  distinguish  between  the  three  concepts  private 
>  wealth,  social  wealth,  and  public  wealth.  The  three 
concepts  are  clear  and  distinct.  There  are  these  three 
kinds  of  income:  private  income,  social  income,  and 
public  income,  using  the  word  public  as  the  adjective 
corresponding  to  the  noun  state  (German:  offentlich). 
A  post-office  building  is  public  wealth  and  also,  of 
course,   social  wealth.'^ 

A  further  distinction  which  must  be  made  is  that 
between  aggregate  wealth  and  average  wealth.  The 
distinction  would  seem  to  be  sufficiently  clear,  and  yet 
we  find  that  economists  have  in  this  particular  not 
always  had  in  their  mind  the  same  conception  of  wealth 
at  all  times  in  the  course  of  their  arguments.  The  con- 
fusion between  these  two  concepts  occurs  perhaps 
most  frequently  when  the  wealth  of  one  nation  is  com- 
pared with  the  wealth  of  another  nation.  We  say,  for 
example,  that  England  and  America  are  the  two  richest 
countries  in  the  world.  Generally  when  we  use  an  ex- 
pression of  this  kind  we  have  in  mind  aggregate  wealth; 
but  sometimes  we  mean  average  wealth.    If  we  should 


WEALTH  AND  ITS  KINDS  25 

say  that  Holland  is  a  richer  country  than  Germany  we 
could  hardly  think  of  anything  else  than  avgiiage  wealth. 
When,  however,  we  read  statements  concerning  the 
alleged  great  wealth  of  some  Oriental  nations  we  note 
that  the  writers  must  have  in  mind  aggregate  wealth. 
In  reality  it  is  probably  the  fact  that  they  are  often  de- 
ceived even  as  to  aggregate  wealth  by  the  wealth  of  a 
very  feWo  Modern  political  economy,  beginning  with 
the  Physiocrats,  has  laid  so  much  stress  upon  the  general 
well-being  and  especially  the  weKare  of  the  wage-earner, 
that  the  idea  of  average  wealth  has  received  an  empha- 
sis which  was  quite  unknown  to  earlier  ages.  Cannan 
points  out  in  an  interesting  manner  the  confusion  of 
thought  in  Adam  Smith.  Adam  Smith,  as  Cannan  says, 
tells  us  in  the  second  paragraph  of  his  Wealth  of  Na- 
tions that  a  nation's  wealth  should  be  measured  by  the 
proportion  between  the  product  of  labour  and  the  num- 
ber who  are  to  consume  it;  but  elsewhere,  without 
warning,  he  uses  wealth  to  mean  aggregate  wealth.^ 

Another  preliminary  observation  must  be  made,  and 
that  is  that  distribution  gives  a  standpoint  from  which 
to  discuss  public  questions.  There  is  scarcely  any  eco- 
nomic topic  which  cannot  be  presented  from  several 
points  of  view.  Each  one  of  the  great  divisions  of  our 
study,  such  as  production,  and  distribution,  simply 
gives  us  a  standpoint.  Take,  for  example,  Davenport's 
Outlines  of  Economic  Theory,  in  which  all  or  nearly  all 
the  economic  topics  are  discussed  under  Distribution. 
Our  study  leads  us,  therefore,  to  consider  nearly  all  the 
topics  in  economics  from  the  standpoint  of  distribution. 

With  the  evolution  of  economic  society,  production 


26    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

■and  distribution  grow  further  and  further  apart;  or  to 
express  the  thought  in  other  words,  their  relationships 
become  less  direct,  more  and  more  indirect.  Let  us  con- 
sider for  a  moment  an  economic  society  in  which  there 
are  only  isolated  households.  This  was  the  ideal  of  the 
ancients.  The  self-sufficiency  of  the  household  was 
characteristic  of  classical  antiquity.  So  also  in  mediae- 
val Germany  we  find  this  condition  in  the  nature 
economy,  or  Naturalwirtschaft  in  the  ninth  and  tenth 
centuries;  ^  and  the  old  English  manor  also  affords 
an  illustration  of  independent  domestic  economy  as 
do  to  some  extent  the  plantations  of  the  South  in 
America  before  the  Civil  War.  In  such  a  regime  dis- 
tribution and  production  are  so  directly  related  that 
they  often  appear  to  be  the  same  process.  The  farmer 
finds  his  income  in  what  he  produces.  It  is  as  the  direct 
fruit  of  the  exertions  of  its  own  members  that  the  house- 
hold gets  its  income.  But  as  society  develops,  division 
of  labour  increases.  Following  up  this  evolution  of  in- 
dustrial society  for  centuries,  we  finally  find  a  man  pro- 
ducing, say,  the  three-hundredth  part  of  a  watch.  This 
fraction  of  the  watch  is  not  his  own,  but  he  receives 
therefor  his  income  in  wages.  There  is  a  good  deal  of 
difference  in  kind  between  his  product  and  what  he  re- 
ceives as  wages,  although  they  may  be  the  same  in 
value. 

This  brings  us  very  naturally  to  the  distinction  clearly 
made  by  John  Stuart  Mill  between  the  nature  of  the 
laws  governing  production  and  those  governing  distri- 
bution. The  laws  of  production,  he  says,  are  the  physi- 
cal laws  of  nature,  while  the  laws  of  distribution  are 


WEALTH  AND  ITS  KINDS  27 

the  laws  enacted  by  man;  the  former  are  part  of  the  nat- 
ural order,  independent  of  and  unchangeable  by  man, 
while  the  latter  are  social  institutions,  human  laws  and 
regulations  of  one  sort  or  another,  which  man  who  has 
made  can  unjnake.  The  laws  of  distribution,  in  short, 
are  more  arbitrary  than  those  of  production.  Mill  thus 
seeks  to  emphasise  human  responsibility  within  the 
field  of  distribution,  while  placing  on  nature,  parsi- 
monious and  cruel  in  his  opinion,  the  responsibility 
for  the  meagreness  of  production.^  /    .^ 

Mill's  statement  is  not  true  without  qualifications, 
and  even  with  his  qualifications  it  seems  inconsistent. 
What  he  says  appears  to  apply  neither  to  production 
nor  to  distribution.  On  the  one  hand  there  is  an  under- 
estimate of  the  human  factor  and  of  its  responsibiUty 
in  production.  For  what  are  the  laws  of  the  production 
of  wealth?  Does  its  production  depend  merely  on  ex- 
ternal nature?  Is  not  the  human  factor  the  only  truly 
active  factor  in  the  production  of  wealth,  and  is  not 
society  in  large  measure  responsible  for  this  human 
factor?  It  is  not  by  any  means  a  question  only,  of 
what  the  particular  human  agent  does,  but  also  of  what 
his  fellow  men  do.  The  fact  is  that  production  and 
distribution  are  much  more  closely  related  than  Mill 
supposed,  and  he  also  failed  to  attend  sufficiently  to  the 
reaction  of  the  one  on  the  other.  Distribution  reacts 
upon  production  in  very  important  ways,  and  for  this 
reaction,  of  course,  even  according  to  Mill's  own  view 
of  the  matter,  society  must  be  held  responsible. 

Production  of  wealth  does  not  vary  simply  with  the 
productive  activities  of  nature.    In  some  parts  of  the 


28    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

world  where  nature  is  exceedingly  prodigal,  we  do  not 
find  any  large  production  of  wealth.  Often  quite  the 
contrary  is  the  case.  It  is  man  that  is  of  chief  signifi- 
cance, not  only  in  the  distribution  but  in  the  production 
of  wealth.  Compare  the  productive  possibilities  of  the 
savage  economy  obtaining  in  even  the  richest  parts  of 
the  western  continent  before  Columbus  with  those  of 
men  possessing  Western  civilisation  and  plunged  (even 
without  acquired  capital)  into  a  comparatively  infer- 
tile region.  Think  also  of  the  extent  to  which  Germany 
has  been  changed  through  the  efforts  of  human  beings. 
Men  are  responsible  for  the  manner  in  which  they  as- 
sociate together,  and  for  the  manner  in  which  the  human 
agent  carries  on  his  activities  in  the  production  of  wealth. 
What  we  really  find  in  the  physical  laws,  so  far  as  pro- 
duction of  wealth  is  concerned,  is  limitations  of  human 
responsibility.  But  the  responsibility  is  not  wholly 
absent. 

Nor  is  Mill's  statement  of  the  matter  quite  true 
when  we  pass  over  to  distribution.  If  the  laws  of  dis- 
tribution were  a  matter  of  human  institution  only,  there 
would  be  a  separation  of  the  two  fields,  production  and 
distribution,  which  as  a  matter  of  fact  does  not  exist. 
Mill  speaks  as  if  he  imagined  some  such  condition  of 
things  as  this:  Men  produce  things  for  consumption. 
The  products  are  all  gathered  in  a  heap  first,  and  then 
they  are  distributed  by  human  agency.  Society  de- 
termines what  the  shares  and  methods  in  this  distri- 
bution shall  be.  But  of  course  it  might  change  the 
shares  if  it  thought  wise  and  adopt  other  methods,  etc. 
This,  as  we  have  seen,  is  a  wholly  mistaken  conception 


WEALTH  AND  ITS  KINDS  29 

of  the  nature  of  production  and  distribution  and  their 
relations  to  each  other. 

It  has  just  been  mentioned  that  distribution  reacts 
upon  production ;  and  to  this  reaction  we  must  give  our 
further  attention.  Let  us  suppose  for  a  moment  that 
without  any  good  reason  society  were  to  change  the 
laws  of  distribution.  Suppose  that  some  Czar  of  the 
human  race  were  to  dictate  what  each  person's  share 
should  be,  and  that  his  commands  were  obeyed.  Let 
us  suppose  that  one  man,  now  receiving  an  income  of 
$5,000  shall  no  longer  have  $5,000  but  only  $500; 
another  with  a  millionaire  income  is  assigned  one  of 
$1,250.  Would  production  not  be  affected  by  this 
change  in  distribution?  Unquestionably;  and  thus  so- 
ciety finds  itself  limited  in  what  it  is  possible  for  it  to  do 
in  the  matter  of  changing  the  laws  of  distribution;  and 
these  limitations  are  due  in  large  measure  to  the  reac- 
tions of  such  changes  in  distribution  on  production  con- 
sidered with  respect  to  quantities  and  qualities  of  wealth 
produced  and  to  direction  of  production.  Of  course  it 
remains  true  that  a  great  deal  can  be  done  by  society  in 
this  matter,  but  it  must  act  witlijn  limits. 
"^The  possibilities  with  regard  to  the  regulation  oT^s^ 
tribution  and  of  the  limitations  on  human  responsi- 
bility may  be  illustrated  by  reference  to  the  communist 
settlements.  There  are  associations  of  men  like  the 
Shakers  which  completely  regulate  distribution,  but 
their  production  is  so  limited  that  the  average  income  is 
not  large.  The  Amana  Society  of  Iowa,  the  most  suc- 
cessful of  existing  communistic  societies,  with  a  great 
deal  of  valuable  Iowa  land,  affords  comfort  to  all,  but 


30     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

it  is  a  comfort  of  a  meagre  sort,  scarcely  compatible 
with  a  high  civilisation.^ 

This  is  perhaps  the  most  appropriate  place  for  a  few 
preliminary  remarks  upon  the  importance  of  distribu- 
tion, the  position  its  problems  occupy  in  the  public 
mind,  and  the  comparative  neglect  of  production  by 
economists.  The  mind  of  society  has  long  been  con- 
centrated on  distribution,  and  its  unsolved  problems 
have  caused,  and  still  cause,  uneasiness.  Similarly  the 
attention  of  economic  scholars  has  long  been  almost 
exclusively  concentrated  on  the  scientific  and  practical 
aspects  of  distribution — wages,  interest,  profits,  monop- 
oly gains,  wealth  and  poverty  occupy  our  time  and 
consume  our  strength.  All  or  nearly  all  our  pressing 
economic  problems  are  looked  at  chiefly  from  the  point 
of  view  of  distribution.  It  seems  to  be  assumed  that  the 
problems  of  production  have  been  solved,  and  we  need 
only  to  distribute  properly  the  wealth  actually  pro- 
duced, or  that  which  may  be  produced.  That  produc- 
tion is  sharply  limited  is  a  thought  that  does  not  enter 
into  the  general  social  self-consciousness;  and  all  ques- 
tions of  the  day  are  so  treated  as  to  lead  to  distribution 
just  as  surely  as  all  roads  used  to  lead  to  Rome. 

The  attention  given  to  distribution  is  not  too  great, 
but  the  attention  given  to  production  has^Bg  been 
altogether  inadequate.  This  was  well  brou^BPut  dur- 
ing the  years  immediately  preceding  the  panic  of  1907  in 
the  United  States,  when  capital  found  ready  employ- 
ment, when  the  area  of  arable  land  was  being  extended, 
when  improvements  in  agriculture  were  rapidly  being 
made,  and  when  the  demand  for  labour  was  so  gjKat 


WEALTH  AND  ITS  KINDS  31 

as  frequently  to  make  satisfactory  control  over  it  ex- 
tremely difficult  if  not  quite  impossible.  If  the  fore- 
man engaged  in  improving  the  streets  in  the  place  where 
the  writer  lives  remonstrated  with  his  careless  and  in- 
different workmen,  they  often  dropped  their  tools, 
knowing  that  another  job  awaited  them  and  no  ques- 
tions would  be  asked.  But  in  the  struggle  for  parts  of 
the  wealth  produced,  the  sharp  limitations  of  produc- 
tion were  perceived.  Improvements  are  possible  and 
are  going  forward,  but  a  small  percentage  added  to  the 
incomes  of  those  who  feel  that  they  do  not  now  have 
enough  would  quickly  exhaust  the  present  possibili- 
ties of  production,  as  is  readily  made  apparent  by  sta- 
tistical computations,  showing  what  would  be  involved 
in  an  increase  of  ten  per  cent,  in  present  production. 
We  need  a  scientific  study  of  the  limits  of  production 
to  show  how  great  is  the  comfort  that  is  universally 
attainable.  It  is  apparent  that  this  comfort  finds  its 
sharpest  limitations  in  personal  services.  The  rich 
man  enjoys  the  attention  of  several  persons,  and  the 
professional  man  with  a  family  cannot  live  in  comfort 
without  at  least  one  servant,  and  in  most  parts  of  the 
world  he  requires  two  or  three.  Whether  this  will  be 
changed  or  not  need  not  now  occupy  our  attention. 
It  is  self-evident  thht  a  condition  of  general  comfort 
which  implies  for  each  person  the  services  of  another  hu- 
man being  can  never  be  universal.^" 

We  may  next  notice  that  distribution  can  be  con- 
sidered either  statically  or  dynamically.  The  following 
is  given  as  an  approximate  definition  of  the  statics  and 
dynamics  of  distribution: 


32    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

By  the  statics  of  distribution  we  mean  the  treatment  of 
the  present  system  of  distribution  without  reference  to  past 
or  future  distribution;  by  the  dynamics  of  distribution  we 
mean  the  treatment  of  the  present  system  of  distribution 
in  relation  to  distribution  in  the  past  and  in  the  future, 
dealing  particularly  with  qualitative  changes. 

Our  concept  is  in  itself  not  a  time  concept,  but  quali- 
tative changes  take  place  in  time.  They  are  evolution- 
ary, and  it  is  only  by  an  unrealistic  abstraction  that 
qualitative  changes  can  be  without  reference  to  past, 
present  or  future. 

The  statics  and  the  dynamics  of  distribution  are 
parts  of  a  larger  whole,  the  statics  and  dynamics  of 
economics.  Mill  has  discussed  the  dynamics  of  eco- 
nomics in  Book  IV  of  his  Principles  of  Political  Economy, 
entitled  ''Influence  of  the  Progress  of  Society  on  Pro- 
duction and  Distribution."  The  statics  and  dynamics 
of  economics  belong  to  the  still  larger  whole,  the  statics 
and  dynamics  of  social  forces.  ^^ 

The  expressions  static  and  dynamic  sociology  were 
introduced  by  Auguste  Comte.  He  says,  ''Social 
dynamics  studies  the  laws  of  succession,  while  social 
statics  inquires  into  those  of  coexistence."  ^-  Social 
statics  gives  a  theory  of  ordef ;  social  dynamics  gives  a 
theory  of  progress.  But  we  must  distinguish  between 
qualitative  change  and  quantitative  change. 

Dynamics  suggests  something  more  than  mere  change., 
without  alteration  of  other  characteristics.    Dynamics 
implies  change,  but  we  can  at  least  conceive  of  a  change 
which  is   simply  quantitative.     Let  us  suppose  that 
in  an  Oriental  society  in  the  course  of  a  century  pop- 


Nf)5^  33 


WEALTH  AND  ITS  KI 

ulation  has  doubled,  but  the  modes  of  production  and 
exchange  continue  unaltered,  while  general  economic 
relations  remain  as  they  were  at  the  beginning  of  the 
century.  Such  a  society  would  be  called  static.  Dy- 
namics suggests  qualitative  changes,  alteration  of  types. 
Professor  Lester  F.  Ward  uses  as  an  illustration  of  the 
difference  between  the  two  the  charity  work  of  the  old 
type  and  philanthropy.  The  old  charity  work  of  which 
he  speaks  belongs  to  statics,  while  true  philanthropy 
pertains  to  dynamics,  ^he  higher  philanthropy  looks 
into  the  causes  of  poverty  and  pauperism.  It  tries 
not  merely  to  assist  paupers  but  to  cure  the  social  body 
of  pauperism.  Dynamic  actions  take  note  of,  and  op- 
erate with,  fructifying  causes. 

Statics  concerns  itself  with  social  forces  in  equilib- 
rium, whether  this  is  in  the  present,  past,  or  future. 
Growth,  of  course,  means  the  opposite  of  equilibrium. 
It  means  continual  change  and  transformation.  Hence 
the  growth  in  population  is  a  dynamic  force,  because 
it  almost  inevitably  brings  about  other  changes,  cer- 
tainly in  modern  times,  and  especially  in  Western 
civilisation.^^  At  the  present  time  any  realistic  study 
of  distribution  must  be  dynamic,  and  a  study  of  static 
distribution  must  be  based  upon  an  imagined  condition 
of  things.  The  constructive  scientific  imagination 
must  arrest  the  flow  of  life  forces  and  attempt  to  grasp 
the  present  without  reference  to  the  forces  which 
brought  it  into  being,  and  without  reference  to  the 
future  which  springs  from  the  present. 

We  have  to  consider  in  real  life  the  present  distri- 
bution, the  result  chiefly  of  individual  efforts,  operating 


34    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

on  the  basis  of  private  property,  inheritance,  contract, 
etc., — in  short,  the  present  social  order.  But  we  have 
to  consider  more  than  the  production  which  flows  from 
the  productive  processes  spontaneously,  as  it  were.  We 
have  to  consider,  as  already  seen,  self-conscious  social 
efforts,  actual  or  contemplated,  to  control  the  distri- 
bution of  wealth  among  the  social  units.  The  tendency 
to  modify  the  distribution  of  wealth  among  classes  is 
perhaps  less  marked.  But  here  as  elsewhere  the  grow- 
ing social  activity  is  characteristic  of  social  develop- 
ment. 

If  we  take  up  the  questions  of  wages,  profits,  interest, 
etc.,  we  find  them  discussed  in  theoretical  treatises  very 
generally  under  the  statics  of  distribution.  On  the 
other  hand,  when  we  discuss  socialism  or  the  various 
other  social  projects  of  the  time,  we  deal  with  distribu- 
tion dynamically."  But  even  relatively,  spontaneous 
life  is  dynamic.  The  Industrial  Revolution  was  the  re- 
sult, not  solely  but  on  the  whole,  chiefly  of  individual- 
ism, meaning  thereby  the  efforts  of  individuals  to  better 
their  conditions;  and  only  gradually  were  the  produc- 
tive processes  brought  under  more  or  less  conscious 
control,  while  the  social  control  of  the  distributive 
processes  has  been  still  slower,  and  is  only  just  now 
fairly  started.  Yet  how  dynamic  was  this  period !  How 
marvellous  the  changes  in  production  and  distribution, 
and  in  the  entire  economic  life!  We  have  as  a  result 
the  saying,  none  the  less  true  because  trite,  that  we 
live  in  a  new  economic  world. 

When  we  thus  speak  of  the  statics  and  dynamics  of 
distribution,  we  do  not  mean  that  we  divide  our  treat- 


WEALTH  AND  ITS  KINDS  35 

ment  of  the  subject  into  those  two  parts,  following  each 
other  in  such  a  way  that  the  first  will  be  separately 
treated  and  disposed  of  and  then  the  other  be  taken  up 
later;  but  we  shall  pass  freely  during  the  discussion 
from  the  one  point  of  view  to  the  other.  They  are  not 
so  much  two  separate  fields  as  two  different  aspects  of 
the  same  field.  But  we  must  always  remember  that 
in  our  actual  life  we  deal  with  dynamic  forces,  and  con- 
ditions of  a  stationary  equilibrium  are  simply  assumed 
as  a  scientific  aid.^^ 


Notes  and  References  to  Chapter  III 

'P.  19.  See  Cannan's  Theories  of  Production  and  Distribution, 
Chap.  I,  "The  Wealth  of  a  Nation,"  pp.  1-2,  where  Carman  treats 
these  terms  at  far  greater  length  than  here  is  possible. 

2  P.  21.  See  treatment  of  goods,  commodities,  and  services  in 
Ely's  Outlines  of  Economics,  pp.  96-98,  where,  however,  wealth  is  re- 
stricted "to  the  stock  of  goods  on  hand  at  a  particular  time"  and 
real  income  is  defined  as  "the  satisfaction  which  we  derive  from  the 
use  of  material  things  or  personal  services  during  a  period  of  time" 
(p.  98).  The  author  is  inclined  to  beheve  on  the  whole  it  is  better  to 
use  wealth  in  the  sense  in  which  it  is  employed  in  the  present  work. 
To  the  older  economists  the  word  wealth,  in  "The  Distribution  of 
Wealth,"  implies  first  of  all  income.  Ordinarily  wealth  means  an 
accumulation  or  stock  of  goods  and  generally  we  can  employ  the 
terms  wealth  and  income  as  distinct  categories  and  do  so  without 
danger  of  confusion. 

2  P.  22.  See  Cannan,  cp.  cit.,  pp.  18,  30  et  seqq.  The  quotation 
from  Mill  is  from  the  1844  edition,  p.  82. 

4  P.  22.  Petty's  Verbum  Sapienti  in  his  computation  of  the 
wealth  of  the  kingdom  speaks  of  accumulated  wealth.  Cf.  Cannan, 
p.  4.  But,  on  the  other  hand,  statisticians  also  make  computations 
of  annual  wealth.  To  use  the  words  of  John  Stuart  Mill  in  the  Pre- 
liminary Remarks  of  his  Principles  of  Political  Economy,  "it  is  no 
part  of  the  design  of  this  treatise  to  aim  at  metaphysical  nicety  of 
definition,  where  the  ideas  suggested  by  a  term  are  already  as  de- 
terminate as  practical  purposes  require"  (p.  2);  on  the  contrary,  it 
is  the  author's  endeavour  to  restrict  this  discussion  to  the  limits 
essential  for  present  purposes,  and  to  avoid  some  recent  refinements 
of  analysis  which  with  their  consequent  terminology  have  to  most 
people  brought  confusion  rather  than  enlightenment. 

*  P.  24.  It  is  unfortunate  that  in  our  elementary  courses  and  trea- 
tises we  have  not  reached  such  an  agreement  in  our  terms  as  to  ren- 
der discussions  of  these  familiar  terms  superfluous  in  a  work  of  this 
kind. 

36 


WEALTH  AND  ITS  KINDS  37 

8  P.  25.  See  Cannan's  treatment,  op.  cit.,  pp.  11-13,  where  other 
illustrations  are  given.  The  author  gladly  acknowledges  indebted- 
ness to  Cannan's  careful  and  discriminating  discussion,  but  he  has 
made  also  essential  deviations. 

^  P.  26.  See  W.  Lotz,  Verkehrsentwicklung  in  Deutschland,  1800- 
1900,  p.  3. 

8  P.  27.  This  point  is  discussed  in  Mill's  Political  Economy,  Bk.  II, 
Chap.  I,  §  I. 

3  P.  30.  For  the  Shakers,  see  Ely's  Labor  Movement  in  America; 
also  Noyes's  History  of  American  Socialism  and  Hind's  American 
Communities  and  Cooperative  Colonies.  For  Amana  see  the  author's 
article  "Amana;  A  Study  of  Religious  Communism,"  Harper's 
Monthly  Magazine,  October,  1902;  also  Mrs.  Bertha  M.  H.  Sham- 
baugh's  Amana,  the  Community  of  True  Inspiration. 

1°  P.  31.  The  following  quotations  all  imply  ideals  of  distribu- 
tion which  lack  a  foundation  in  proved  possibihties  of  production. 
John  Galsworthy,  in  A  Message  on  Woman's  Labour  Day,  July  17, 
1909,  wrote:  "We  are,  I  firmly  beUeve,  within  measurable  distance 
of  a  world  in  which  no  one  will  work  at  a  wage  that  will  not  by  itself 
keep  body  and  soul  together.  .  .  .  Before  the  minimum  wage — 
the  only  sound  foundation  for  a  decent  industrial  system — can  be 
established  and  enforced  throughout  every  branch  of  labour,  there 
must  come  a  period  of  disturbance  and  change.  .  .  .  Better  to 
undergo  the  greatest  sufferings  for  a  few  years  than  to  go  on  all  your 
lives  working  at  starvation  wages.  ...  If  you  can  link  yourself 
with  the  women  of  America,  France,  and  Germany,  you  will  have 
a  position  such  as  women  workers  have  never  had  since  the  world 
began," 

Frederic  Harrison  has  asserted: 

"I  have  always  held  and  taught  that  industry  cannot  be  in  a 
settled  and  healthy  state  until  seven  hours  is  made  the  normal 
standard  of  a  day's  labour  and  a  fixed  'living  wage'  for  a  regular 
stated  term  is  recognised  as  being  merely  the  irreducible  part  of 
remuneration,  the  rest  being  proportioned  to  the  profits  resulting 
from  the  work  done." — "Labour  Unrest — A  Prophecy,"  in  What  the 
Worker  Wants. 

Mr.  A.  M.  Simons,  editor  of  the  national  edition  of  the  socialist 
paper,  7'he  Milwaukee  Leader,  advocates  a  six-hour  working  day, 
with  an  annual  income  of  !|2,000  for  the  worker.    This  same  idea 


38    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

finds  expression  in  a  late  pamphlet  by  Mr.  Fred.  D.  Warren,  editor 
of  the  Appeal  to  Reason,  entitled  "Two  Thousand  Dollars  per  Year 
and  a  Six-Hour  Day."  In  a  recent  communication  to  the  writer, 
Mr.  Simons  has  even  gone  further,  stating  that  "an  income  of 
$10,000  per  family  (or  an  amount  having  a  purchasing  power  equiv- 
alent to  that  sum  at  present)  is  easily  possible,  and  I  would  be  glad 
to  defend  that  thesis  with  any  one." 

Mr.  Galsworthy,  like  many  others,  assumes  that  there  is  in  exist- 
ence, or  may  readily  be  brought  into  existence,  a  quantity  of  wealth 
which  will  make  possible  liis  ideal — certainly  a  most  desirable  one. 
His  underlying  thought  is  that  there  is  a  flow  of  income-wealth  which 
may  be  secured  by  a  united  and  determined  effort  on  the  part  of  the 
workers.  No  suggestion  is  made  that  it  is  necessary  to  secure  an 
enlarged  production  and  that  one  of  the  most  essential  things  is  to 
increase  the  eflaciency  of  the  workers.  Similarly  the  ideals  in  regard 
to  a  shortened  working  day  rest  only  upon  most  superficial  estimates 
of  production. 

When  it  comes  to  an  income  of  $10,000  a  year  for  every  family, 
it  is  necessary  only  to  examine  into  the  eonsimiption  of  a  family 
with  that  income  to  show  the  absolute  impossibiUty  of  this  prop- 
osition. An  appendix  is  added  by  Mr.  W.  I.  King,  Instructor  in 
Statistics  in  the  University  of  Wisconsin,  in  which  an  attempt  is 
made  to  illustrate  statistically  the  limitations  of  distribution  in  pro- 
duction. 

11  P.  32.  See  on  this  general  subject  two  interesting  articles:  one  is 
by  Professor  Lester  F.  Ward,  on  "Static  and  Dynamic  Sociology," 
in  the  Political  Science  Quarterly,  June,  1895;  and  the  other  by  Pro- 
fessor Albion  W.  Small,  on  "Static  and  Dynamic  Sociology,"  in  the 
American  Journal  of  Sociology,  September,  1895.  An  ingenious  dis- 
cussion of  the  statics  and  dynamics  of  distribution  is  found  in  Profes- 
sor John  B.  Clark's  Distribution  of  Wealth;  see  Chap.  I,  especially 
pp.  29-35  et  passim. 

12  P.  32.  Positive  Philosophy  (tr.  by  Harriet  Martineau),  Vol.  II, 
p.  70. 

"  P.  33.  A  very  good  article  on  the  general  aspects  of  the  subject 
is  found  in  the  Monist  for  July,  1895,  by  Professor  Joseph  Leconte, 
"The  Theory  of  Evolution  and  Social  Progress." 

"  P.  34.  Professor  Small  in  the  article  referred  to  above  places  so- 
cialism under  the  statics  of  sociology.    That  might  correctly  apply 


WEALTH  AND  ITS  KINDS  39 

to  the  earlier  French  socialism;  but  the  modern  socialist  looks  upon 
socialism  as  an  evolution. 

"  P.  35.  For  an  excellent  treatment  of  the  topic  see  Professor  Al- 
fred Marshall's  Preface  to  the  Fifth  Edition  of  his  Principles  of 
Economics,  pp.  viii  to  xii,  inclusive. 


CHAPTER  IV 

THE  PLACE  OF  DISTRIBUTION  IN  A  SYSTEM  OF  ECONOMICS 

We  may  now  attempt  to  place  distribution.  Where 
is  its  place  in  general  economics? 

We  may  divide  the  whole  subject  of  economics,  that 
is  to  say,  the  entire  field  of  economic  study  and  re- 
search, into  three  main  parts,  following  in  this  respect 
the  Germans,  and,  what  is  more  important,  following 
what  seems  to  be  a  natural  division  of  the  subject- 
matter.  They  are  as  follows: 
I.  General  Economics. 
II.  Special  Economics. 

III.  Public  Finance. 

The  first  of  these  divisions,  general  economics,  gives 
a  preliminary  survey  of  the  entire  field  of  study.  The 
second  division,  special  economics,  takes  up  particular 
topics,  with  special  reference  also  to  time  and  place. 
This  part  is  sometimes  called  economic  policy  and  some- 
times practical  economics,  depending  in  part  on  the 
method  of  treatment  and  the  place  where  emphasis  is 
laid.  It  embraces  items  which  as  a  whole  do  not  fit  in 
elsewhere.  As  an  example  of  what  is  meant,  consider 
forestry,  a  special  topic  which  can  be  developed  much 
further  and  more  in  detail  in  special  economics  than 
would  be  permissible  in  general  economics.  There  seems 
to  be  no  reason  in  the  nature  of  things  why  more  atten- 

40 


DISTRIBUTION  IN  ECONOMICS  41 

tion  should  be  given  to  this  subject  than  to  many  others, 
save  as  the  exigencies  of  time  and  place  may  appear  to 
demand  it.  And  so  with  many  other  subjects.  Special 
economics  has  been  compared  with  general  economics  as 
branches  to  a  tree.^  The  third  division,  public  finance, 
deals  with  public  revenues,  their  expenditure  and  their 
administration. 

The  three  divisions  of  economics  in  Germany  grew  up 
naturally  as  a  result  of  the  position  of  the  German  uni- 
versities in  the  life  of  the  German  states.  The  German 
universities  have  for  two  centuries  or  more  held  a  posi- 
tion in  German  life  like  that  which  American  universi- 
ties, and  especially  the  University  of  Wisconsin,  have 
begun  to  occupy  in  the  life  of  the  American  nation. 
They  have  been  largely  engaged  in  preparing  men  for 
civic  life,  for  positions  as  civil  servants,  as  trained  and 
specialised  Beamten,  to  use  the  German  term  which 
is  as  well  defined  as  Offiziere  in  the  army.  The  ne- 
cessities of  the  case  required  that  a  treatment  of  general 
principles  should  be  followed  by  a  special  and  detailed 
treatment  in  practical  application,  according  to  the 
needs  of  time  and  place.  At  the  same  time,  the  finan- 
cial life  of  the  nation  was  of  such  paramount  impor- 
tance that  public  finance  (Finanzwissenschaft)  became 
a  third  distinct  part  of  a  general  system  that  may  be 
called  political  economy.  Thus  we  find  Justus  Chris- 
toph  Dithmar,  one  of  the  two  men  who  were  first^  to  hold 
professorships  of  political  economy,^  dividing  his  syste- 
matic treatise,  called  Introduction  to  the  Economic  Sci- 
ences of  the  Police  Power  and  Finance,  into  five  parts, 
with  the  following  titles: 


42    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

I.  Concerning  the  Economic  Science  of  the  Police 
Power  and  Finance  in  General. 

II.  Concerning  Economics.     Book  I.     Concerning 
Land  Economy. 

III.  Concerning  Municipal  Economy. 

IV.  Concerning  the  Police  Power. 
V.  Concerning  Finance.^ 

Of  the  nineteenth  century  divisions  and  titles  in 
Germany  we  may  take  that  of  Knies  as  typical: 

I.  Theoretische  Nationalokonomie  (Theoretical  Po- 
litical Economy). 

II.  Praktische  Nationalokonomie  und  Volkswirts- 
chaftspolitik  (Practical  Political  Economy). 

III.  Finanzwissenschaft  (The  Science  of  Finance). 
And  Knies  gives  the  following  definitions:  ''By  political 
economy  we  understand  economics,  economic  policy 
(or  practical  political  economy),  and  the  science  of 
finance." 

"Theoretical  economics  investigates  the  general 
nature  of  the  given  subject." 

"Practical  economics  takes  economic  phenomena  in 
their  historical  form  as  subject  of  its  investigations, 
and  has  in  consequence  a  close  connection  with  law; 
for  example,  gilds,  exchange,  banks,  monopoly,  as  es- 
tablished by  the  government,  and  having  their  legal 
side.  A  great  part  of  the  law  relates  to  economic  things 
and  it  is  necessary  to  study  law.  On  the  other  hand, 
the  law  has  a  great  influence  on  the  economic  life.  Eco- 
nomic policy  deals  with  the  economic  functions  of 
government  and  chiefly  with  respect  to  legislation 
and    administration.     It   has   to    consider    also    the 


DISTRIBUTION  IN  ECONOMICS  43 

past,    for   the  economic  life  is  a  process  of  develop- 
ment."^ 

The  development  in  England  has  been  a  different  one, 
and  it  is  due  in  part  at  least  to  external  causes.  The 
absence  of  a  close  connection  between  the  English 
economists  and  the  tasks  of  government  has  brought 
it  about  that  EngHsh  political  economy  has  lacked  a 
certain  realism  found  in  German  economics  and  has 
been  more  speculative.  And  this  separation  has  been 
increased  by  the  study  of  government  as  a  separate 
discipline  which  has  made  good  progress  in  English- 
speaking  countries.  Moreover,  in  England,  publishers 
could  not  have  been  found,  nor  a  reading  public,  for 
bulky  treatises  in  three  or  more  volumes,  such  as  are 
common  in  Germany.  The  English  have  generally  been 
content  with  one  volume  economic  treatises.  Adam 
Smith  had  a  fairly  inclusive  treatment  in  his  Wealth 
of  Nations,  in  which  we  find  five  ''Books"  with  the  fol- 
lowing titles: 

I.  Of  the  Causes  of  Improvement  in  the  Produc- 
tive Powers  of  Labour,  and  of  the  Order  according  to 
which  its  Produce  is  naturally  distributed  among  the 
different  Ranks  of  the  People. 

II.  Of  the  Nature,  Accumulation,  and  Employ- 
ment of  Stock. 

III.  Of  the  different  Progress  of  Opulence  in  differ- 
ent Nations. 

IV.  Of  Systems  of  Political  Economy. 

V.  Of  the  Revenue  of  the  Sovereign  or  Common- 
wealth. 
But  there  has  been  an  inclination  on  the  part  of  the 


44    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

English  economists  to  neglect  public  finance,  owing  to 
the  circumstances  which  have  just  been  explained; 
John  Stuart  Mill  treating  this  important  subject  in 
Book  V  of  his  Principles  of  Political  Economy  under  the 
head  of  the  ''Influence  of  Government",  along  with 
his  discussion  of  the  "Functions  of  Government  in 
General"  and  the  "Grounds  and  Limits  of  the  Laissez- 
faire  or  Non-interference  Principle." 

We  notice  also  an  inclination  on  the  part  of  English 
and  American  writers  to  look  upon  public  finance  as 
separate  and  distinct  from  economics,  and  we  have  a 
volume  on  Public  Finance  by  the  English  (Irish)  econ- 
omist Professor  Bastable,  and  in  the  United  States  one 
by  Professor  H.  C.  Adams.  But  as  economics  comes  to 
be  more  thoroughly  cultivated  and  developed  in  Eng- 
land and  America,  we  find  tendencies  in  the  direction  of 
the  German  arrangements,  beginning  to  assert  them- 
selves. Professor  Alfred  Marshall,  as  appears  from  the 
Preface  to  the  Fifth  Edition  of  his  Principles  of  Eco- 
nomics, was  at  the  time  it  was  written  planning  a  vol- 
ume on  National  Industry  and  Trade,  and  a  special 
treatment  of  Money,  Credit,  and  Employment,  also  of 
the  Functions  of  Government,  but  he  said  nothing  of 
any  purpose  with  respect  to  public  finance. 

Specialisation  in  economics  has  been  carried  further  in 
the  United  States  than  elsewhere,  and  we  find  ourselves 
offering  thirty  or  forty  different  courses  in  our  American 
universities;  but  they  can  be  arranged  under  the  three 
general  heads:  first,  general  principles;  second,  special 
treatment  of  topics  like  money,  banking,  popula- 
tion,   labour  problems,  and  generally  with  emphasis 


DISTRIBUTION  IN  ECONOMICS  45 

upon    policy    (economic    politics);  and    third,    public 
finance. 

Further  discussions  of  these  divisions  would  take  us 
too  far  from  our  present  task.  We  find  distribution 
under  general  economics,  so  far  as  the  principles  are 
concerned.  It  is  one  of  the  traditional  divisions  in 
treatises  on  theoretical  economics,  other  divisions 
being  production  and  consumption.  Exchange  is  fre- 
quently made  a  separate  and  distinct  part  of  economic 
treatises,  but  it  is  in  reality  a  part  of  the  productive 
process,  separated  out  for  purposes  of  convenience  and 
pedagogy. 

But  as  treated  in  the  present  work,  distribution  is 
more  than  a  part  of  general  economics.  It  takes  in  the 
fundamental  institutions  of  society,  which  could  also 
be  treated  under  production,  although  it  is  beheved  that 
distribution  gives  a  better  point  of  view.  It  passes  on 
to  the  separate  shares  in  distribution.  It  takes  up  in- 
dividual fortunes,  proposed  and  actual  modifications  in 
the  distribution  of  wealth,  and  will  not  be  complete 
in  accordance  with  the  intentions  of  the  writer  until 
the  distribution  of  wealth  is  treated  with  reference  to 
social  progress.  We  have  thus  a  general  economic  phi- 
losophy, presented  from  a  point  of  view  which  gives  a 
guiding  thread  and  unity  to  the  whole.^ 

After  the  general  introduction,  this  entire  field  is 
covered  in  five  "Books"  with  the  following  titles: 

I.  The  fundamentals  in  the  existing  socio-economic 
order,  treated  from  the  point  of  view  of  distribution. 
II.  The  separate  shares  in  distribution. 

III.  Individual  fortunes. 


46    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

IV.  Actual  and  contemplated  modifications  of  the 
distribution  of  wealth. 

V.  Social  progress  and  wealth  distribution. 

Book  I,  as  it  has  been  presented  by  the  author  in  uni- 
versity lectures,  is  divided  into  the  following  ''Parts": 

Part        I    ProDortv 

T  Treated  together  as  Part 

Private  and  Public. 


I  of  Book  I  in  the  present 
work. 


Part      II.  The  Inherit- 
ance of  Property. 

Part     III.  Contract  and  its  Conditions. 

Part     IV.  Vested  Interests  (or  Rights). 

Part       V.  Personal  Conditions. 

Part     VI.  Custom. 

Part    VII.  Competition. 

Part  VIII.  Monopoly. 

Part     IX.  Public  Authority. 

Part  X.  Benevolence,  or  the  Caritative  Principle, 
and  Distribution. 

Without  entering  into  further  details  at  the  present 
time,  enough  has  been  said  to  place  distribution  in  a 
system  of  economics,  and  to  show  the  relation  of  the 
present  treatise  in  a  general  way  to  the  larger  whole.' 


Notes  and  References  to  Chapter  IV 

1  P.  41.  This  comparison  may  be  pushed  too  far.  It  indicates 
merely  a  general  resemblance.  See  a  discussion  of  it  in  Cohn's 
System  der  Nationalokonomie,  Vol.  I,  Grundlegung,  in  his  "  Ueber- 
blick  ":  compare  also  his  "  Einleitung,"  2nd  Chap.,  "  Die  National- 
okonomie im  Kreise  der  Wissenschaften." 

2  P.  41 .  Justus  Christoph  Dithmar  "  was  one  of  the  first  two  profes- 
sors, whom  Frederick  William  I  appointed  to  the  newly  established 
chairs  of  Cameralistics  (Kameralwissenschaft) ;  Dithmar  in  Frank- 
furt an  der  Oder,  Gasser  in  Halle.  While  Gasser  had  taken  his  point 
of  view  from  Jurisprudence,  Dithmar  had  come  from  History  into 
Cameralistics."  Translated  from  Geschichte  der  Nationalokonomie 
in  Deutschland,  by  William  Roscher,  p.  431. 

3  P.  41.  Called  for  a  long  time  "cameraHstics",  Kameralwissen- 
schaften.  It  may  properly  be  translated  political  economy,  as  the 
development  of  the  cameralistic  sciences  into  modern  political  econ- 
omy has  been  unbroken. 

*  P.  42.  Einleitung  in  die  Oekonomische  Polizei-und  Kameralwis- 
senschaften. 

I.  Von  den  Oekonomischen  Polizei-  und  Kameralwissenschaften 
iiberhaupt, 

II.  Von  der  Oekonomischen  Wissenschaft,  Erstes  Buch:  Von 
der  Landokonomie. 

III.  Von  der  Stadt-Oekonomie. 

IV.  Von  der  Polizeiwissenschaft. 
V.  Von  der  Kameralwissenschaft. 

The  reader  may  prefer  the  arrangement  of  another  Cameralist, 
namely,  Darvies,  as  given  in  Haney's  History  of  Economic  Thought, 
pp.  121-124.  Haney's  entire  Chapter  VIII  on  Cameralism  may  be 
consulted  with  profit  in  this  connection. 

s  P.  43.  The  following  is  taken  from  the  author's  lecture  notes, 
written  when  he  was  a  student  of  Professor  Knies: 

"Unter  Politischer  Oekonomie  vcrstehen  wirdie  Volkswirtschafts- 
Ichre,  die  Volkswirtschaftspolitik,  und  die  Finanzwissenschaft." 

"  Theoretische  Nationalokonomie  erforscht  das  allgemeine  Wesen 
des  gegebenen  Gegenstandes." 

47 


48      PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

"Praktische  Nationalokonomie  nimmt  wirtschaftliche  Erschein- 
ungen  in  geschichtlicher  Form  als  Gegenstand  ihrer  Forschungen 
und  darum  hat  sie  eine  enge  Verbindung  mit  dem  Recht  (z.  B. 
Zunft,  Wechsel,  Banken,  Monopol,  etc.,  von  der  Regierung  ver- 
liehen;  haben  doch  auch  ihre  rechtliche  Seite.  Grosser  Teil  des 
Rechts  bezieht  sich  auf  wirtschaftliche  Dinge  und  notig  diese  zu 
studieren  um  Recht  zu  verstehen  und  wiederum  darum  auch  Recht 
hat  grossen  Einfluss  auf  Wirtschaft)." 

"  Volkswirtschaf tspoUtik  behandelt  Aufgaben  der  Staatsregier- 
ung  auf  dem  Gebiete  der  Volkswirtschaft  (natiirlich  meistens  auf 
dem  Wege  der  Gesetzgebung  und  Verwaltung).  Vergangenheit  zu 
betrachten,  denn  wirtschaftUches  Leben  ist  auch  ein  Entwicklungs- 
gegenstand." 

8  P.  45.  This  is  an  ambitious  plan,  outlined  years  ago  by  the 
writer.  It  has  been  worked  out  unequally,  but  a  great  deal  of  it  is 
in  manuscript  already,  although  not  in  finished  form.  Life  is  short 
and  uncertain,  but  the  author  hopes  that  he  may  be  able  to  finish  it. 

'  P.  46.  That  is,  as  conceived  by  the  present  writer,  many  of  whose 
colleagues  would  undoubtedly  wish  to  dissent  from  his  views  regard- 
ing the  scope  of  economics  and  the  proper  subdivision  of  the  field. 


BOOK  I 

THE  FUNDAMENTALS  IN  THE  EXISTING 
SOCIO-ECONOMIC  ORDER,  TREATED 
FROM  THE  STANDPOINT  OF  DISTRI- 
BUTION 

PART  I 

PROPERTY,  PUBLIC  AND  PRIVATE 


CHAPTER  I 

PROPERTY,     PUBLIC    AND    PRIVATE,    THE    FIRST    FUNDA- 
MENTAL INSTITUTION  IN  THE  DISTRIBUTION  OF  WEALTH 

When  we  treat  distribution  philosophically  and 
thoroughly,  we  must  at  once  ask  ourselves  questions 
like  these :  What  is  the  first  thing  which  we  have  to  con- 
sider in  distribution?  What  is  there  behind  the  dis- 
tribution which  exists  at  any  one  time  and  place?  Or, 
what  have  been  the  forces  underlying  the  historical 
evolution  of  distribution?  There  is  one  answer,  and 
only  one,  to  this  question.  That  which  underlies  the 
distribution  at  any  given  time  is  the  socio-economic 
order  which  exists  at  that  time.  Not  that  the  socio- 
economic order  is  the  only  thing  that  underlies  distri- 
bution. The  state  of  industrial  technique,  the  bounty 
(or  niggardliness)  of  the  physical  environment,  the 
distribution  of  individual  abilities  and  aptitudes  as 
brought  about  by  natural  (including  social)  selection 
all  underlie  the  distribution  of  wealth;  but  that  which 
is  dominant,  that  which  reaches  deepest  in  distribution 
is  this  order.  The  first  thing  in  the  discussion  of  dis- 
tribution, then,  is  the  existing  socio-economic  order, 
or  for  the  sake  of  brevity,  but  less  accurately,  the  ex- 
isting social  order. 

There  is  such  an  order.  It  has  been  a  defect  of  the 
English  political  economy  that,  while  its  existence  has 

61 


52    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

not  been  denied,  this  order  has  been  taken  for  granted, 
and  little  has  been  said  about  it.  But  it  is  the  merit  of 
the  Germans  that  they  have  studied  this  order,  and 
perhaps  this  is  their  chief  service.  Take,  for  example. 
Professor  Wagner;  the  first  part  of  his  monumental 
work  on  political  economy  is  called  Grundlegung  der 
Politischen  Oekonomie  (''Foundation-laying  of  Political 
Economy"),  and  is  almost  entirely  taken  up  with  the 
fundamental  institutions  of  the  existing  order: — notice 
that  the  term  used  is  not  fundamental  principles,  for 
that  might  lead  to  misapprehension.  Any  writer  may 
present  what  are  his  fundamental  principles,  but  what 
Wagner  discusses  in  his  Grundlegung  are  the  funda- 
mental institutions. 

What  are  these  institutions  which  give  us  our  social 
order  on  its  economic  side?  (we  employ  this  limitation 
for  the  economic  institutions  do  not  make  up  the  whole 
of  the  social  order,  there  being  others  not  primarily  of 
an  economic  character,  such  as  the  church,  the  family, 
etc.).  There  are  several  institutions  of  economic  sig- 
nificance which  we  m^y  call  fundamental  institutions  of 
the  first  rank.  We  place  them  under  five  heads : 
I.  Property,  public  and  private. 
II.  Inheritance:  the  transmission  of  property  from 
generation  to  generation. 

III.  Contract  and  its  conditions. 

IV.  Vested  rights. 

V.  Personal  conditions. 
But  the  analysis  may  be  differently  made: 

I.  We  could  have  property,  and  under  this  head 
deal  with  inheritance  as  a  mode  of  its  acquisition,  al- 


PROPERTY,  PUBLIC  AND  PRIVATE  63 

though  as  will  be  seen  later  in  this  work,  the  position  is 
taken  that  the  right  of  inheritance  is  a  different  right 
from  property.  Vested  rights  can  be  regarded  as  prop- 
erty rights  in  more  or  less  peculiar  aspects. 

II.  Contract  becomes  the  second  fundamental  in- 
stitution, and 

III.  Personal  conditions  is  the  last  one  in  this  trilogy. 

The  analysis  depends  upon  the  way  that  we  look  at 
things  and  the  purpose  we  have  in  view.  There  is 
necessarily  an  overlapping.  Contract  rights  are,  as  in- 
terpreted by  American  courts,  property  rights,  gen- 
erally speaking.  The  Supreme  Court  of  the  United 
States  holds  that  the  right  to  make  a  contract  is  a  prop- 
erty right.  ^  Nevertheless,  contract  is  treated  by  itself 
as  a  distinct  right,  although  sometimes  simply  to  get  an- 
other point  of  view. 

But  it  requires  no  deep  study  nor  profound  reflec- 
tion to  lead  to  the  thought  that  property,  and  espe- 
cially private  property,  means  distribution.  It  signifies 
a  distinction  between  mine  and  thine,  and  that  is  what 
we  mean  by  distribution.  We  mean  the  assignment  of 
either  accumulated  property  or  income  to  individuals 
for  their  use  and  exclusive  control.  So  the  very  first 
thing  that  greets  us  is  the  idea  of  private  property.  The 
inheritance  of  property,  broadly  used  as  in  this  work, 
embraces  those  regulations  which  determine  how  prop- 
erty rights  pass  from  generation  to  generation,  and  is  so 
fundamental  in  our  social  order  that  this  order  could  be 
upset  by  a  radical  treatment  of  inheritance. 

Let  us  next  consider  contract  and  its  conditions. 
Private  property  comes  to  us  largely  through  contract. 


54    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

How  do  we  receive  any  income  otherwise  than  through 
contract?  If  we  are  employed  by  others,  contract  regu- 
lates the  condition  of  employment  and  determines  the 
income  that  we  shall  receive.  If  we  are  engaged  in  buy- 
ing and  selling,  we  virtually  make  contracts  and  through 
these  contracts  receive  our  income.  Apart  from  con- 
tract, indeed,  there  is  the  subject  of  gifts.  Things  may 
come  to  us  as  gifts,  but  ordinarily  and  regularly  most  of 
us  receive  our  income  chiefly  through  contract,  or,  to  ex- 
press the  same  thought  differently,  we  receive  through 
contract  the  portion  of  the  national  dividend  which  is 
assigned  to  us  for  our  support  and  use.  And  we  can 
see  also  in  the  cases  continually  coming  before  the 
courts  for  decision,  how  serious  a  mistake  it  is  to  over- 
look contract.  Although  in  many  particulars  the  law 
has  lagged  behind  economic  development,  in  this  par- 
ticular economic  theory  in  its  development  has  lagged 
behind  the  law,  and  economists  have  not  kept  pace  with 
the  law,  because  cases  relating  to  income  are  constantly 
before  the  courts  and  are  decided  upon  some  theory  of 
contract. 

Vested  interests  or  vested  rights  are  generally  rights 
arising  through  contract,  express  or  implied.  Ordi- 
narily vested  interests  are  the  result  of  contract  and 
property,  but  they  may  arise  otherwise.  While  post- 
poning a  formal  definition  to  a  later  place  in  this  treatise 
we  may  now  say  that  vested  interests  are  rights  of  an 
economic  significance  which  it  is  held  cannot  be  ad- 
versely affected  without  pecuniary  indemnification. 

Then  take  personal  conditions,  also, — slavery  and 
serfdom  and  conditions  under  free  contract;  surely  we 


PROPERTY,  PUBLIC  AND  PRIVATE  55 

must  recognise  that  these  are  fundamental  in  distri- 
bution. We  might  say  personal  freedom  instead  of 
personal  conditions,  and  very  often  we  do  find  discus- 
sions of  personal  or  industrial  freedom;  but  the  term 
personal  conditions  is  used  because  historically  it  is 
more  accurate,  for  we  discuss  not  only  freedom  but 
its  absence;  and  also  because  it  is  not  a  unit,  but  a  com- 
plex concept  and  we  may  have  a  greater  or  less  degree 
of  it. 

We  have,  then,  five  fundamental  institutions  in  our 
economic  order.  These  institutions  we  shall  designate 
as  fundamentals  of  the  first  rank.  We  have  also  five 
forces  which  operate  to  bring  about  distribution  upon 
the  foundations  laid  by  these  five  institutions.  We 
shall  call  these  five  forces  fundamentals  of  the  second 
rank.  These  five  forces,  or  fundamentals  of  the  second 
rank,  are: 

I.  Custom. 
II.  Competition. 

III.  Monopoly. 

IV.  Authority  (Public  authority  especially,  although 
not  exclusively) . 

V.  Benevolence. 

While  all  these  fundamentals  are  mentioned  in  eco- 
nomic treatises,  they  are  not  discussed  thoroughly  and 
systematically.  Frequently  a  mere  allusion  is  found 
when  thorough  examination  is  required.^ 

We  must  examine  these  fundamentals,  because  they 
are  not  given  once  for  all.  If  they  were  given  once  for 
all  and  were  unchangeable,  then  we  could  take  them 
for  granted,  saying  that  they  constitute  forces  which 


56    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

operate  continuously,  and  simply  put  them  to  one  side 
as  forces  which  have  existed  thousands  of  years  and 
which  always  operate  in  one  direction  and  with  the  same 
result.  But  that  is  not  the  true  condition  of  affairs. 
They  are  not  fixed,  but  are  in  a  perpetual  state  of  evolu- 
tion. And  this  must  be  carefully  noted,  that  every 
change  in  one  of  the  fundamentals  produces  a  corre- 
sponding change  in  the  distribution  of  wealth. 

It  is  very  often  said,  that  if  one  wants  to  improve  the 
distribution  of  wealth  one  must  change  men,  and  bring 
it  about  that  they  shall  have  different  characteristics, 
making  them  more  temperate,  more  industrious,  more 
intellectual,  etc.,  so  that  for  one  thing  they  shall  weigh 
more  accurately  the  advantages  of  the  future  when  con- 
trasted with  the  advantages  of  the  present;  in  other 
words,  so  that  they  shall  be  ready  to  sacrifice  the  pres- 
ent to  the  future.  While  it  is  true  that  changes  in  men 
in  these  particulars  will  change  distribution,  the  point 
emphasised  here  is  this :  Take  men  as  they  exist  to-day 
in  Germany,  in  England,  in  the  United  States,  with 
their  characteristics  whatever  they  may  be,  with  their 
individual  qualities  whatever  they  are,  neither  more 
nor  less  temperate,  neither  more  nor  less  frugal  and  in- 
tellectual than  now;  gifted  with  neither  more  nor  less 
foresight  and  self-control  than  now;  nevertheless  a 
change  in  the  fundamentals  will  bring  about  a  corre- 
sponding and  commensurate  change  in  the  distribution 
of  wealth. 

Now  if  this  be  so,  we  cannot  in  distribution  take  our 
fundamentals  for  granted.  There  is  a  difference  be- 
tween changing  fundamentals  and  changing  the  facts 


PROPERTY,  PUBLIC  AND  PRIVATE  57 

to  which  they  give  rise.  Some  overlook  this,  although 
it  is  generally  felt.  There  are  some  who  say,  in  opposi- 
tion to  socialism,  for  example,  that  if  we  redistribute  the 
wealth  of  to-day  the  old  inequalities  will  appear  to- 
morrow. But  this  scarcely  touches  sociaUsm  at  all. 
Those  who  say  this  have  in  mind  change  in  the  facts  to 
which  the  fundamentals  give  rise.  But  the  radical 
socio-economic  reformers  do  not  care  so  much  about 
the  facts  to  which  the  fundamentals  give  rise  as  about 
the  fundamentals  themselves.  They  want  to  change 
the  fundamentals,  private  property,  contract,  etc.  And 
it  must  be  admitted,  that  if  the  changes  they  desire  are 
to  be  recommended,  the  socialists  are  proceeding  in  the 
right  way  to  bring  about  these  changes.  They  are 
attacking  the  fundamentals,  and  no  doubt  if  the  funda- 
mentals could  be  changed  they  could  change  without 
limit  the  distribution  of  wealth ;  but  on  the  other  hand, 
their  changes  might  bring  about  (a)  disastrous  results 
as  to  production,  (b)  other  evil  social  consequences. 

It  may  be  asked,  why  not  place  personal  conditions 
first?  This  might  seem  to  be  logical,  for  as  the  begin- 
ning and  end  of  economic  activity  is  man,  why  not  be- 
gin with  man  instead  of  the  institution  property?  Al- 
though this  seems  to  be  the  logical  thing  to  do,  namely, 
to  begin  with  man  or  the  conditions  under  which  man 
toils  and  acquires  wealth,  yet  it  is  not  the  right  thing  to 
do,  because  we  find  on  looking  into  economic  history 
that  man  has  been  the  tool  of  others,  has  lived  for  the 
gain  of  others,  and  that  he  has  been  in  consequence 
private  property  himself.  Consequently  we  cannot 
understand  personal  conditions  until  we  understand 


58    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

what  private  property  means,  because  when  histori- 
cally we  begin  to  examine  personal  conditions  we  come 
up  against  slavery,  which  means  private  property. 
Moreover  the  passage  of  the  human  element  from  pri- 
vate property  to  freedom  has  been  a  long  and  contin- 
uous process,  still  going  on.  To  look  at  this  same  topic 
from  a  different  angle,  notice  that  personal  conditions 
including  freedom  are  limited  by  property  rights  and 
to-day  vary  more  or  less  with  the  scope  of  property. 
And  the  subject  of  personal  conditions  also  implies  a 
treatment  of  contract,  because  to-day  when  we  want 
to  change  personal  conditions  we  encounter  contract 
as  an  opposing  force,  wherever  it  is  rigid  and  inflexible. 
You  say  you  want  to  do  so  and  so.  You  become  a  mem- 
ber of  the  legislature  and  persuade  your  fellow  members 
to  do  so  and  so  and  the  desired  law  is  passed.  But  it  is 
brought  before  the  courts  and  declared  null  and  void, 
because  it  is  held  to  be  contrary  to  constitutional  pro- 
visions concerning  contract.  We  must  accordingly 
place  private  property  before  personal  conditions,  and 
we  also  have  to  examine  contract  before  personal  con- 
ditions. 

The  first  fundamental  institution  in  the  distribution 
of  wealth  is  therefore  property,  and  especially  private 
property;  or  we  may  express  ourselves  more  elaborately 
and  say  that  the   first  fundamental  institution 

IN  THE  DISTRIBUTION  OF  WEALTH  IS  THE  SPHERE  OF 
PRIVATE    PROPERTY. 

What  do  we  mean  hy  the  sphere  of  private  property? 
The  sphere  of  private  property  points  to  the  extensivity 
and  the  intensivity  of  property  rights.    The  extensiv- 


PROPERTY,  PUBLIC  AND  PRIVATE  59 

ity  of  the  institution  calls  attention  particularly  to  its 
relation  to  public  property,  and  to  free  goods,  because 
it  finds  its  bounds  extensively,  on  the  one  hand  in  free 
goods,  and  on  the  other  hand  in  public  property.  Exten- 
sivity  is  not  except  incidentally  a  geographical  concept; 
it  refers  rather  to  the  number  and  kind  of  things  that 
may  be  made  private  property.  As  an  illustration  of 
change  in  extensivity,  take  the  public  domain  of  the 
United  States.  We  Americans  had  at  one  time  an  im- 
mense public  domain  in  our  country,  which  has  mostly 
become  private  property.  Public  property  has  become 
less  extensive,  and  private  property  more  so.  Private 
property  in  that  particular  instance  has  gained  on  public 
property.  On  the  other  hand,  let  us  take  the  publicly 
owned  forest  land  in  New  York  State.  Land  once  pri- 
vate has  become  public,  so  that  in  this  particular,  pri- 
vate property  has  become  less  extensive,  and  public 
property  more  extensive;  for  we  are  all  familiar  with 
the  fact  that  New  York  State  has  acquired  large  tracts 
in  the  Adirondacks  ^  and  elsewhere.  In  that  particular, 
private  property  has  lost  and  public  property  gained  in 
extensivity.  Or  we  may  take  the  Niagara  Falls  Park  as 
an  illustration;  it  was  once  private  property  but  is  now 
public  property.  The  Prussian  railway  system  also 
furnishes  an  illustration  of  growing  extensivity  of  pub- 
lic property. 

Now  the  intensivity,  on  the  other  hand,  of  private 
property,  and  also  of  public  property  for  that  matter, 
refers  to  the  rights  which  property  includes.  Private 
property  includes  rights  more  or  less  numerous.  Far 
from  being  a  simple  thing,  it  is  complex,  and  has  been 


60    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

called  by  law  textbook  writers  "a  bundle  of  rights."  ^ 
This  is  a  good  expression,  and  we  can  say  that  the  in- 
tensivity  of  property  relates  to  the  size  of  the  bundle, 
or  perhaps  better  still  to  the  number  of  sticks  in  it;  a 
constantly  varying  number,  sometimes  including  more, 
sometimes  fewer.  If  the  number  increases  intensivity 
becomes  greater,  and  if  it  decreases  intensivity  becomes 
less.  From  1750  to  1850  there  was  a  general  tendency 
on  the  part  of  private  property  to  become  more  exten- 
sive and  also  more  intensive.  During  the  last  thirty  or 
forty  years  it  is  possible  that  private  property  has  be- 
come rather  less  extensive,  but  it  is  not  certain  that  it 
has  on  the  whole  lost  anything  in  intensivity,  having 
now  lost  and  now  gained. 

Let  us  take  a  hypothetical  case  as  an  illustration: 
Suppose  I  own  some  real  property  and  have  certain 
shore  rights.  Let  us  suppose  that  they  do  not  carry 
with  them  the  right  to  exclude  others  from  the  stream 
or  body  of  water,  as  is  the  case  in  Rhode  Island  along 
the  shores  of  the  ocean  and  the  great  bodies  of  water 
that  are  connected  with  the  ocean.  For,  according  to 
the  charter  of  Charles  II,  the  right  of  access  to  the 
shores,  and  the  right  to  walk  on  them,  belongs  to  the 
general  public  in  Rhode  Island,  and  the  right  to  lands 
adjacent  to  the  shores  does  not  carry  with  it  the  right 
to  exclude  others  from  access  to  the  shore.  Now  if  that 
right  should  be  conveyed,  private  property  would  be- 
come more  intensive.^ 

The  history  of  Massachusetts  affords  an  illustra- 
tion of  legislation  rendering  the  rights  of  private  prop- 
erty in  shore  lands  more  intensive.    According  to  the 


PROPERTY,  PUBLIC  AND  PRIVATE  61 

common  law  rule,  private  ownership  extended  only  to 
high  water  mark.  A  colony  ordinance  in  the  middle  of 
the  seventeenth  century,  however,  extended  private 
ownership  to  low  water  mark  where  the  sea  does  not 
ebb  above  100  rods.  But  it  has  been  decided  that  the 
sea-shore  could  not  be  used  by  the  public  to  reach  the 
water,  as  that  is  private  property  within  the  hundred- 
rod  limit,  and  subject  to  no  public  use.^ 

Take  another  illustration.  It  is  held  that  in  parts  of 
Germany  the  rights  of  owners  of  forests  do  not  carry 
with  them  the  right  to  exclude  others  from  the  en- 
joyment of  the  forests  as  pleasure  grounds,  those  own- 
ing the  forests  not  having  an  unlimited  right  to  exclude 
others  from  using  them  as  pleasure  grounds  within 
limits,  especially  from  the  right  to  walk  through  them. 
What  is  technically  called  a  servitude  has  arisen,  as  in 
some  beautiful  forests  in  Bavaria  on  the  Starnberger 
See,  through  which  the  writer  walked  in  the  summer  of 
1911,  the  owner  having  no  right  to  exclude  the  pubHc, 
even  had  he  desired  to  do  so.  But  in  the  Prussian 
Parliament  and  in  the  Reichstag  bills  have  been  dis- 
cussed which  if  enacted  into  law  would  have  increased 
the  rights  of  forest  owners  in  this  particular,  giving  them 
greater  rights  or  strengthening  their  rights  to  exclude 
others  from  walking  through  the  forests,  and  they 
would  thus  have  made  the  right  of  private  property  a 
more  intensive  right  than  before.  And  similarly  the 
right  of  private  property  may  be  made  less  intensive. 
Some  rights  in  the  bundle  may  be  taken  away. 

John  Stuart  Mill  says  that  the  institution  of  private 
property  does  not  necessarily  in  itself  include  the  right 


62    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  exclude  others  from  the  enjoyment  of  great  natural 
wonders,  Uke  Niagara  Falls.^  As  construed,  it  has  car- 
ried with  it  such  a  right.  Let  us  suppose  that  through 
custom  or  statute  that  right  is  taken  away.  Then  the 
right  of  private  property  becomes  a  less  intensive  right. 

It  has  already  been  said  in  a  general  way  in  these 
pages  that  these  fundamentals  in  the  existing  social 
order  may  not  be  taken  for  granted,  because  they  are 
changeable.  Let  us  notice  furthermore  that  the  changes 
in  private  property  and  in  all  the  fundamentals  are 
very  largely  the  result  of  other  economic  changes.  We 
have  here  perpetual  action  and  reaction.  The  economic 
changes  in  division  of  labour  and  exchange,  continually 
going  on,  bring  about  changes  in  private  property  and 
contract,  in  vested  interests  and  personal  conditions, 
and  then  these  changes  react  upon  division  of  labour 
and  exchange. 

The  right  of  private  property  especially  may  not  be 
taken  for  granted,  although  English  writers  have  so 
treated  it.  This  has  been  well  brought  out  by  Cannan 
in  his  Theories  of  Production  and  Distribution,  where  he 
says:  "It  probably  never  occurred  to  Adam  Smith  to 
speculate  as  to  the  possibility  of  society  existing  and  en- 
joying necessaries,  conveniences,  and  amusements  with- 
out separate  property.  Separate  property  was  to  him 
a  '  natural '  institution,  which  existed  in  much  the  same 
form  among  savage  tribes  of  hunters  and  fishermen  as 
in  eighteenth  century  England.  Malthus  thought  sepa- 
rate property  a  necessary  institution  which  would  soon 
be  reestablished  if  its  abolition  were  ever  accomplished 
by  followers  of  Godwin.    Ricardo,  as  became  a  stock- 


PROPERTY,  PUBLIC  AND  PRIVATE  63 

broker,  took  it  for  granted  without  any  consideration. 
Consequently  in  almost  the  whole  of  the  doctrines  of 
these  writers  the  existence  of  private  property  and  the 
practice  of  exchange  is  assumed." 

John  Stuart  Mill,  however,  says  clearly  that  private 
property  does  not  always  mean  the  same  thing,  but 
is  constantly  changing,  sometimes  meaning  one  thing 
and  sometimes  another.  He  says  it  is  the  first  thing  to 
be  considered  in  distribution,  and  so  treats  it.  He  does 
not  handle  the  subject  exhaustively,  however,  but 
simply  touches  upon  it,  and  unfortunately  other  English 
writers  have  not  advanced  much  further  the  study  thus 
begun. 

It  may  be  said  in  general  that  the  French  economists 
do  not  differ  essentially  in  their  treatment  of  property 
and  the  fundamental  economic  institutions  of  society 
from  the  English.  Jean  Baptiste  Say,  for  example,  in  his 
Political  Economy,  Book  I,  Chap.  14,  uses  these  words 
in  speaking  of  property:  "It  is  the  province  of  specula- 
tive philosophy  to  trace  the  origin  of  the  right  of  prop- 
erty; of  legislation  to  regulate  its  transfer;  and  of  politi- 
cal science  to  devise  the  surest  means  of  protecting  that 
right.  Political  Economy  recognises  the  right  of  prop- 
erty solely  as  the  most  powerful  of  all  encouragements 
to  the  multiplication  of  wealth,  and  is  satisfied  with  its 
actual  stability,  without  inquiring  about  its  origins  or  its 
safeguards."  Notice  that  he  says,  it  is  one  of  the  most 
powerful  of  all  encouragements  to  the  multiplication 
of  wealth  and  then  does  not  inquire  into  its  origin,  its 
stability,  or  its  safeguards,  thus  implying  that  it  al- 
ways works  in  one  direction  and  with  uniform  force. 


64    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

In  his  Cours  Complet  d'Economie  Practique,  however,  in 
Part  IV,  he  discusses  the  influence  of  institutions  upon 
the  economy  of  societies.  In  Chapter  2  he  uses  words 
in  regard  to  property  similar  to  those  already  quoted. 
Nevertheless  he  devotes  five  chapters  to  different  kinds 
of  property.  While  these  are  creditable,  they  are  on 
the  whole  formal  and  descriptive,  and  his  treatment  of 
property  does  not  influence  his  general  economic  theory. 
Another  French  writer,  however,  deserves  special  men- 
tion in  this  connection,  and  that  is  Courcelle  Seneuil, 
who  discusses  fundamental  institutions  in  his  Traite 
d'Economie  Politique,  the  flrst  edition  of  which  appeared 
in  1858-9  and  the  third  in  1891.  His  Book  II  of  Vol.  I 
is  entitled,  ''De  I'appropriation  des  richesses."  There 
are  two  modes  of  appropriation,  he  says,  based  respec- 
tively on  liberty  and  authority.  He  develops  this  idea 
at  length  and  in  a  very  suggestive  fashion.  A  typical 
quotation  is  as  follows  (pp.  215,  216):  ''The  faculties 
of  the  individual  are  developed  and  employed  in  that 
social  milieu  in  the  midst  of  which  each  of  us  begins  and 
ends  his  existence;  the  laws  of  the  appropriation  (dis- 
tribution) of  labour  and  of  wealth  are  thus  superim- 
posed; they  are  social,  and  emanate  from  a  sovereign 
authority.  One  can  at  least  imagine  a  social  order  in 
which  distribution  ('appropriation')  is  regulated  in 
every  detail  by  authority,  but  we  are  not  able,  except 
with  great  difficulty  and  by  premising  great  changes  in 
human  nature  as  we  know  it,  to  imagine  a  system  of 
distribution  determined  only  by  liberty." 

Again,  (p.  217)  after  discussing  the  growth  of  indi- 
vidual liberty,  he  says:  "However,  freedom  of  labour 


PROPERTY,  PUBLIC  AND  PRIVATE  65 

and  the  right  of  property  remain  guaranteed,  deter- 
mined and  limited  by  social  authority,  under  the  sov- 
ereignty of  which  the  industrial  hierarchy  is  estabhshed 
and  modified  every  day  by  contracts,  under  general  con- 
ditions which  are  very  simple." 

There  is  much  more  in  this  vein.  Courcelle  Seneuil 
himself  thought  this  emphasis  on  the  fact  that  liberty 
(as  conceived  by  the  classical  economic  writers)  and 
authority  (in  the  sense  of  social  control,  both  direct 
and  through  institutions)  were  coordinate  factors  in 
determining  distribution,  was  one  of  his  principal  con- 
tributions.   CJ.  Book  I,  Appendix  No.  I,  p.  509. 

The  treatment  of  property  and  contract  by  Cour- 
celle Seneuil  deserves  recognition.  Unfortunately,  his 
perception  of  the  importance  of  the  fundamental  eco- 
nomic institutions  did  not  lead  in  his  hands  to  any  large 
results,  and  the  suggestions  he  made  failed  to  produce 
a  strong  impression  upon  the  French  economists,  just 
as  the  suggestions  of  Mill  failed  to  produce  the  effect 
in  England  which  might  have  been  anticipated. 

What  is  here  given  in  regard  to  the  English  and 
French  writers  is  merely  suggestive  and  illustrative,  and 
cannot  be  further  elaborated  in  this  place,  inasmuch  as 
to  do  so  would  take  us  too  far  into  the  history  of  eco- 
nomic thought. 

English  and  American  courts  have  likewise  generally 
taken  property  for  granted,  basing  it  on  theories  of  nat- 
ural and  inalienable  rights.  ''The  right  of  acquiring 
and  possessing  property "  and  having  it  protected, 
is  one  of  the  "  natural,  inherent,  and  inalienable 
rights  of  man."     [Vanhornc  v.  Dorrance,  2  Dall.  310 


66    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

(1795).]  These  ''natural  rights"  are  looked  upon  as 
growing  out  of  the  nature  of  man,  not  depending  pri- 
marily on  law  but  on  the  civilised  state  of  human  exist- 
ence. [See  Borden  v.  State,  11  Ark.  519,  44  Am.  Dec. 
217,  (1851).]  The  theory  of  our  law  is  that  it  would  be 
impossible  to  have  our  present  civilisation  without  the 
institution  of  private  property  in  some  form  or  other. 
As  we  shall  see  more  clearly  as  we  proceed,  the  tendency 
is  toward  an  increasing  public  interest  in  private  property, 
hut  no  tendency  whatever  is  discovered  towards  an  abroga- 
tion of  the  right  and  this  is  clearly  the  drift  of  the  decisions 
of  American  courts.  Blackstone's  account  of  the  origin 
and  development  of  the  rights  of  property  is  interesting 
in  this  connection.^ 


Notes  and  References  to  Chapter  I 

1  P.  53.  American  courts  have  uniformly  held,  that  the  "right  to 
acquire  and  possess  property  necessarily  includes  the  right  to  con- 
tract." [Leep  V.  Ry.  Co.,  58  Ark.  407  (1894)  at  p.  415;  Mathews  v. 
People,  202  111.  389  (1903) ;  Commonwealth  v.  Perry,  155  Mass.  117 
(1891);  Frorer  v.  People,  31  N.  E.  395  (1893)]. 

Interesting  cases  bearing  on  this  "right"  have  come  up  in  the 
courts,  pertaining  to  certain  kinds  of  labour  contracts.  See  Shaver 
V.  Penn.  Ry.  Co.,  71  Fed.  931  (1896);  Commonwealth  v.  Perry,  155 
Mass .  1 1 7  ( 1 89 1 ) .  See  also  dissenting  opinion  of  Mr .  Justice  Holmes ; 
Leep  V.  Ry.  Co.,  58  Ark.  407  (1894).  These  are  merely  illus- 
trative.   Many  other  references  could  be  given. 

2  P.  55.  Professor  Commons  in  his  Distribution  of  Wealth  uses 
these  words  in  speaking  of  distribution,  "It  is  the  outcome  of  social 
organization  based  on  private  property,  division  of  labor,  and  ex- 
change." He  apparently  does  not  mean  here  to  give  the  result  of  a 
careful,  philosophical  analysis,  but  throws  it  out  as  a  suggestion. 
This  would  imply  three  fundamentals,  private  property,  exchange, 
and  division  of  labour.  This  statement  brings  before  us  one  of  the 
corner-stones  of  the  social  order,  namely,  private  property,  and  un- 
doubtedly brings  before  us  two  of  the  main  features  of  modern  eco- 
nomic society,  namely,  exchange  and  division  of  labour  which,  how- 
ever, do  not  seem  to  be  fundamental  in  the  same  sense  that  private 
property  and  contract  are.  Exchange  and  division  of  labour  are  the 
natural  outcome  of  the  fundamentals.  Given  private  property,  con- 
tract, and  competition,  we  must  have  sooner  or  later  division  of  la- 
bour and  exchange.  They  are  the  consequence  of  these  funda- 
mentals. 

^  P.  59.  In  1910  the  area  amounted  to  1,660,715  acres.  Sixteenth 
Annual  Report  of  the  Forest,  Fish  and  Game  Conmiission  of  New 
York,  p.  74. 

*  P.  60.  An  important  case  in  which  this  idea  of  property  as  a 
bundle  of  rights  is  developed  is  Eaton  v.  The  Boston,  Concord  and 
Montreal  Railroad,  51  N.  H.  504,  pp.  510-2  (1872.) 

^  P.  60.  The  Charter  of  Rhode  Island  and  Providence  Plantations, 
granted  by  Charles  II  in  1063,  specifies: 

G7 


68    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

"...  they  (the  subjects)  and  every  or  any  of  them,  shall  have 
full  and  free  power  and  liberty  to  continue  and  use  the  trade  of  fish- 
ing upon  the  said  coast,  in  any  of  the  seas  thereunto  adjoining,  or 
any  arms  of  the  seas,  or  salt  water,  rivers  and  creeks,  where  they 
have  been  accustomed  to  fish;  and  to  build  and  to  set  upon  the  waste 
land,  belonging  to  the  said  Colony  and  Plantations,  such  wharfs, 
stages  and  work  houses  as  shall  be  necessary  for  the  salting,  drying 
and  keeping  of  their  fish,  to  be  taken  or  gotten  upon  that  coast." 
(Thorpe,  Constitutions,  Vol.  6,  p.  3219.) 

And  these  rights  are  re-guaranteed  in  the  Rhode  Island  Consti- 
tution of  1843: 

"The  people  shall  continue  to  enjoy  and  freely  exercise  all  the 
rights  of  fishery,  and  the  privileges  of  the  shore,  to  which  they  have 
been  heretofore  entitled  under  the  charter  and  usages  of  this  state. 
But  no  new  right  is  intended  to  be  granted,  nor  any  existing  right 
impaired,  by  this  declaration."    (Art.  1,  Sec.  17.) 

8  P.  61.  The  Colony  ordinance,  1647,  stated  that  private  owner- 
ship was  subject  to  the  right  of  navigation  and  other  public  rights, 
subject  to  "low  water-mark  where  the  sea  doth  not  ebb  above  100 
rods."  But  the  decision  against  using  the  sea-shore  to  reach  water 
was  given  in  Butler  v.  Atty.  Gen.  Mass.,  8  L.  R.  A.  (N.  S.)  1047, 
80  N.  E.  688  (1907).  See  also  the  earlier  case  of  Blundell  v.  Catterall, 
5  Barn.  &  Aid.  268  (1821);  also  Farnham,  Waters,  Vol.  I,  p.  657. 
The  right  to  bathe  is  recognised  if  water  can  be  reached  by  public 
highways,  landings,  etc.  Public  regulation  may  be  established  gov- 
erning the  use  of  the  shore,  if  public. 

An  interesting  discussion  of  this  ordinance  is  given  in  the  leading 
case  on  the  police  power  by  Chief  Justice  Shaw,  of  Massachusetts, 
in  Commonwealth  v.  Alger  (7  Cush.  53)  1851;  reprinted  in  Thayer's 
Cases  on  Constitutional  Law,  Vol.  I,  pp.  693-706.  The  date  1647  is 
as  given  in  this  opinion. 

^  P.  62.  "The  exclusive  right  to  the  land  for  purposes  of  cultiva- 
tion does  not  imply  an  exclusive  right  to  it  for  purposes  of  access; 
and  no  such  right  ought  to  be  recognized,  except  to  the  extent  nec- 
essary to  protect  the  produce  against  damage,  and  the  owner's  pri- 
vacy against  invasion.  The  pretension  of  two  dukes  (1848)  to  shut 
up  a  part  of  the  Highlands,  and  exclude  the  rest  of  mankind  from 
many  square  miles  of  mountain  scenery  to  prevent  disturbance  to 
wild  animals,  is  an  abuse;  it  exceeds  the  legitimate  bounds  of  the 


PROPERTY,  PUBLIC  AND  PRIVATE  69 

right  of  landed  property.  When  land  is  not  intended  to  be  culti- 
vated, no  good  reason  can  in  general  be  given  for  its  being  private 
property  at  all;  and  if  any  one  is  permitted  to  call  it  his,  he  ought 
to  know  that  he  holds  it  by  sufferance  of  the  community,  and  on  an 
implied  condition  that  his  ownership,  since  it  cannot  possibly  do 
them  any  good,  at  least  shall  not  deprive  them  of  any,  which  they 
could  have  derived  from  the  land  if  it  had  been  unappropriated." 
Principles  of  Political  Economy,  Bk.  II,  Chap.  II,  §  6. 

It  is  precisely  in  this  spirit  that  a  bill  was  introduced  into  the 
British  Parliament  in  1909,  entitled  "A  Bill  to  secure  to  the  Public 
the  right  of  Access  to  Mountains  and  Moorlands  in  Scotland. "  It 
provides  that,  "Subject  to  the  provisions  hereinafter  contained,  no 
owner  or  occupier  of  uncultivated  mountain  or  moorlands  in  Scot- 
land shall  be  entitled  to  exclude  any  person  from  walking  or  being 
on  such  lands  for  the  purposes  of  recreation  or  scientific  or  artistic 
study,  or  to  molest  him  in  so  walking  or  being."  [See  2,  Bill  No.  31, 
British  Parliamentary  Papers,  1909,  Vol.  I.]  The  provisions  referred 
to  are  intended  to  prevent  any  abuse  on  the  part  of  the  general  pub- 
lic of  the  rights  granted  which  interfere  with  the  legitimate  use  of 
the  property  by  the  owner.  It  is  to  be  observed  that  it  is  restricted 
to  Scotland.  It  has  not  as  yet  become  a  law,  but  is  illustrative  of 
the  drift  of  opinion. 

In  England  an  organisation  called  "The  National  Trust "  has  been 
formed  for  the  ownership  of  places  of  historic  interest  or  natural 
beauty,  in  the  interest  of  the  public.  It  now  controls  thirty-five 
properties.  People  are  urged  to  contribute  to  commemorate  the 
late  King  Edward.     Country  Life  (England),  July  15, 1911. 

*  P.  66.  See  Blackstone's  Commentaries,  Bk.  II,  Chap.  I. 


APPENDIX  TO  CHAPTER  I 

THE  DISCUSSION  OF  PROPERTY  IN  ECONOMIC  LITERATURE 

Although  the  classical  English  political  economy  neg- 
lected property  we  find  the  subject  treated  by  writers 
who  may  be  regarded  as  Adam  Smith's  predecessors 
and  contemporaries,  but  with  little  appreciation  of  its 
economic  significance.  The  treatment  is  chiefly  found 
in  works  of  a  somewhat  general  character  which  come 
within  the  field  of  political  and  social  science,  or  perhaps 
we  may  say  political  philosophy,  using  the  expression 
in  a  broad  sense.  Such  writers  as  Hobbes,  Locke,  More, 
Harrington,  Ferguson  and  Godwin  discussed  property 
along  with  other  social  and  economic  subjects. 

Hobbes  and  Locke  give  us  theories  of  the  origin  of 
property,  discussed  later  in  this  work  (Chapter  XXII 
of  Part  I).  Sir  Thomas  More  in  his  Utopia  (1516)  and 
Godwin  in  his  Political  Justice  (1792)  alike  found  the 
roots  of  political  and  economic  evils  in  private  property 
and  recommended  communism — Godwin  anarchism  as 
well.  The  discussion  of  property  in  Harrington's 
Commonwealth  of  Oceana  (1656)  has  greater  significance, 
because  Harrington  connects  political  and  economic 
power,  and  advocates  a  wide  distribution  of  landed 
property  as  a  basis  of  the  commonwealth.  Ferguson's 
discussion  of  property  in  his  History  of  Civil  Society 
(1765)  is  formal  and  lacks  economic  significance.    Other 

70 


PROPERTY  IN  ECONOMIC  LITERATURE  71 

writers  in  abundance  could  be  cited  who  mention  prop- 
erty and  who  discuss  it  in  some  of  its  phases,  especially 
theological  writers.  But  they  do  not  give  us  an  eco- 
nomic treatment  of  property. 

On  the  other  hand,  we  do  find  discussions  of  property 
of  some  economic  significance  by  a  class  of  writers  who 
have  been  unduly  neglected  by  historians  of  economic 
theories,  namely,  the  authors  of  the  older  works  on 
husbandry.  Many  of  them  show  an  appreciation  of  the 
significance  of  private  property  in  land.  Mention  may 
be  made  of  Bhth's  Husbandry  (1652),  of  Jethro  Tull's 
Horse  Hoeing  Husbandry  (1733),  and  of  the  various 
works  of  Arthur  Young  and  William  Marshall,  which 
appeared  at  the  close  of  the  eighteenth  and  early  part 
of  the  nineteenth  century;  also  of  the  various  other 
authors  who  wrote  the  Agricultural  Survey  of  England 
and  reported  to  the  old  Board  of  Agriculture  (1793- 
1825).  These  writers  discussed  tenancy  in  its  various 
forms,  also  large  and  small  holdings,  compensation  for 
improvements,  occupying  ownership — all  economic 
questions  of  property.  Arthur  Young's  oft-quoted 
remark  that  'Hhe  magic  of  property  turns  sand  into 
gold"  has  real  economic  significance. 

When  we  come  to  Adam  Smith's  Wealth  of  Nations 
we  find  a  treatment  of  political  economy  which  does  not 
include  any  treatment  of  property  showing  its  signifi- 
cance; but  Adam  Smith  included  property  in  the  book 
which  he  planned  but  did  not  publish,  the  character  of 
v/hich  is  indicated  by  his  lectures  on  Justice,  Revenue, 
Police  and  Arms.  But  an  examination  of  the  notes  of 
these  lectures  as  published  shows  a  discussion  which  is 


72    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

purely  formal  and  lacks  even  the  first  glimmering  of  an 
idea  of  the  economic  meaning  of  property. 

It  was,  as  we  have  seen,  under  the  influence  of  the 
philosophy  of  nature,  that  the  successors  of  Adam  Smith 
dropped  the  discussion  of  property  and  of  fundamental 
economic  institutions  generally.  It  is  here  especially 
that  we  see  the  influence  of  the  Physiocrats  and  of  the 
French,  but,  as  noted  already.  Mill  again  took  up  the 
subject;  unhappily,  however,  he  was  not  generally  fol- 
lowed in  England  or  America.  The  treatment  of  prop- 
erty and  contract  was  relegated  to  writers  on  juris- 
prudence, political  science,  moral  philosophy,  etc. 
Among  these  we  find  a  noteworthy  treatment  in  Ben- 
tham,  who  is  said  to  have  continued  the  older  tradition, 
and  likewise  in  Austin,  whose  work  cannot  be  omitted 
from  any  mention  of  English  contributions  to  the  eco- 
nomic discussion  of  property.  And  some  modern  au- 
thorities on  jurisprudence  have  followed  the  good  ex- 
ample set  by  these  older  writers.  Among  these  the 
late  Professor  F.  W.  Maitland  is  conspicuous.  (See 
his  Domesday  Book  and  Beyond,  1907,  and  his  Collected 
Papers,  1911.) 

The  early  English  socialists,  however,  necessarily 
discussed  property  and  even  to-day  possibly  the  best 
discussion  of  property  by  English  economic  writers  is 
found  in  the  writings  of  the  English  socialists. 

On  the  other  hand,  in  Germany,  the  connection  of 
economics  with  the  actual  life  of  the  state  renders  it  im- 
possible that  property  could  be  omitted  in  economics. 
It  is  instructive  to  take  an  English  textbook  of  political 
economy  belonging  to  the  classical  school  and  compare 


PROPERTY  IN  ECONOMIC  LITERATURE  73 

it  with  the  discussion  of  pohtical  economy  by  Professor 
Knies  in  his  Politische  Oekonomie  vom  Geschichtlichen 
Standpunkte,  first  edition  1853,  second  edition  1883. 
In  this  book  we  find  an  appreciation  of  the  significance 
of  property  in  economic  hfe  and  a  discussion  of  it  in 
different  parts  of  the  book.  For  example,  in  Part  II, 
Chapter  3,  we  find  a  discussion  of  property  in  capital. 
In  Book  III,  Chapter  2,  we  find  a  discussion  of  private 
property  regarded  as  an  absolute  and  unlimited  right, 
and  the  refutation  of  this  idea  of  private  property;  also 
illustrations  given,  by  a  discussion  of  property  among 
the  Greeks  and  Romans  and  the  old  Germans.  Then 
follows  an  examination  of  various  theories  of  property, 
and  a  discussion  of  the  proposed  extension  of  the  con- 
cept of  property  to  personal  services  and  relations. 
All  this  is  mentioned  merely  by  way  of  illustration. 
It  is  contended  that  in  universities,  one  chief  function 
of  which  is  to  prepare  men  for  life  as  servants  of  the 
state  and  in  which  political  economy  must  therefore  be 
realistic,  property  could  not  be  neglected  by  any  true 
authority,  not  even  when  the  influence  of  the  French 
social  philosophy  of  nature  was  at  its  height. 

Professor  Cannan  speaks  about  the  neglect  of  prop- 
erty by  English  writers,  and  in  glancing  through  his 
treatment  of  Theories  of  Production  and  Distribution 
in  English  Political  Economy  from  1776  to  1848,  the 
author  does  not  find  that  the  word  property  occurs  in 
the  analytical  table  of  contents. 

It  is  interesting  to  turn  to  two  or  three  modern  Eng- 
lish and  American  writers.  President  Hadley's  work  on 
political  economy,  entitled  Economics — An  Account  of 


74    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  Relation  between  Private  Property  and  Public  Wel- 
fare, appeared  in  1896.  The  title  itself  would  indi- 
cate an  exhaustive  treatment  of  private  property  be- 
cause it  shows  that  public  welfare  depends  upon  it. 
While  Hadley  says  more  about  property  than  most  of 
the  English  works,  his  Economics  does  not  differ  essen- 
tially in  its  treatment  of  property  from  the  classical 
English  political  economy.  Hadley  distinguishes  be- 
tween public  wealth  (social  wealth  in  its  broadest  sense, 
including  pure  air,  etc.)  and  private  property  ("rights  of 
exclusion"):  which  suggests  the  emphasis  laid  by  Lau- 
derdale, Sismondi  and  others  upon  the  difference  be- 
tween '^ private  riches"  and  "public  wealth".  Prop- 
erty is,  however,  treated  as  essentially  a  unified  concept, 
not  as  something  perpetually  in  flux,  changing  the  dis- 
tribution of  wealth  with  every  change  in  its  own  content. 
The  chief  point  in  Hadley' s  treatment  is  the  emphasis 
laid  and  well  laid  upon  the  favourable  influence  of  prop- 
erty in  increasing  the  production  of  wealth.  Strangely 
enough  he  says  little  about  property  and  distribution, 
although,  as  already  seen,  property  itself  means  distri- 
bution. 

Turning  to  Alfred  Marshall's  great  work,  the  Princi- 
ples of  Economics,  we  find  in  the  index  under  the  "rights 
of  property"  reference  to  four  different  places.  In  the 
first  reference  (p.  48)  the  rights  of  property  are  discussed 
in  a  broad  and  liberal  spirit;  and  it  is  worth  while  to 
quote  what  he  says  at  this  point : 

"The  rights  of  property,  as  such,  have  not  been  venerated 
by  those  master  minds  who  have  built  up  economic  science; 
but  the  authority  of  the  science  has  been  wrongly  assumed 


PROPERTY  IN  ECONOMIC  LITERATURE  75 

by  some  who  have  pushed  the  claims  of  vested  rights  to  ex- 
treme and  anti-social  uses.  It  may  be  well  therefore  to  note 
that  the  tendency  of  careful  economic  study  is  to  base  the 
rights  of  private  property  not  on  any  abstract  principle, 
but  on  the  observation  that  in  the  past  they  have  been  in- 
separable from  solid  progress;  and  that  therefore  it  is  the 
part  of  responsible  men  to  proceed  cautiously  and  tenta- 
tively in  abrogating  or  modifying  even  such  rights  as  may 
seem  to  be  inappropriate  to  the  ideal  conditions  of  social 
life." 

It  will  be  seen  that  there  is  no  reference  here  to  any 
natural  rights  in  support  of  property;  but  it  is  brought 
forward  as  a  thing  which  ought  to  be  treated  carefully, 
because  in  the  past  it  has  been  found  inseparable  from 
social  progress. 

The  same  thought  is  repeated  on  p.  721.  On  this 
page  also  we  find  a  sentence  which  should  be  quoted: 

"And  private  property,  the  necessity  for  which  doubtless 
reaches  no  deeper  than  the  qualities  of  human  nature,  would 
become  harmless  at  the  same  time  that  it  became  unneces- 
sary." 

The  idea  is  that  property  would  become  unnecessary 
if  human  nature  changed  in  such  a  manner  that  all  men 
should  become  angelic  in  character  and  at  the  same 
time  it  would  become  harmless.  If  property  reaches  to 
the  same  depth  as  the  qualities  of  human  nature  do,  it 
would  seem  to  be  thoroughly  established. 

The  index  refers  also  to  p.  800,  in  which  Marshall 
discusses  the  single  tax.  He  speaks  about  the  adverse 
effects  of  a  change,  especially  a  sudden  change  in  taxa- 
tion which  should  exempt  buildings  and  lay  the  tax 


76    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

exclusively  on  site  values.  He  says  truly  that  it  would 
add  to  the  value  of  some  properties  at  the  expense  of 
others.    He  also  says: 

"But  unless  accompanied  by  energetic  action  on  the  part 
of  urban  authorities  in  planning  out  the  lines  on  which  towns 
should  grow,  it  would  result  in  hasty  and  inappropriate  build- 
ing; a  mistake  for  which  coming  generations  would  pay  a 
high  price  in  the  loss  of  beauty  and  perhaps  of  health." 

And  this  can  be  seen  in  the  United  States  where  the 
property  tax  on  site  values  gives  us  in  many  places  a 
far  nearer  approximation  to  the  single  tax  than  we  find 
elsewhere.  While  our  system  of  taxation  on  full  selHng 
value  is  one  of  which  the  present  author  approves,  at  the 
same  time  he  thinks  we  do  have  these  evils  of  which 
Marshall  makes  mention,  and  that  these  evils  are  to  be 
guarded  against  by  such  action  as  he  suggests. 

We  are  also  referred  to  page  803,  in  which  we  are 
told  that  to  abolish  private  ownership  of  land  after  it 
has  been  recognised  would  destroy  security  and  shake 
the  foundations  of  society.  At  the  same  time  we  do 
find  approval  given  to  a  larger  taxation  of  land  at  the 
expense  of  extreme  rights  in  private  property  in  land, 
and  especially  do  we  find  a  reconamendation  that  the 
revenue  yielded  by  such  taxation  should  be  used  to  se- 
cure air  and  light  and  play  room. 

Modern  American  writers  appear  generally  to  give 
more  attention  to  property  than  the  modern  English 
economists  do.  This  opinion  seems  to  be  substantiated 
by  an  examination  of  Professor  Taussig's  Principles 
of  Economics.     Turning  to  the  index,  five  references 


PROPERTY  IN  ECONOMIC  LITERATURE  77 

are  found,  but  three  of  these  are  to  whole  chapters. 
In  Chapter  Fifty-four  inheritance  is  discussed,  and  then, 
in  Section  Six,  the  grounds  on  which  private  property 
rests  are  examined.  We  find  frank  mention  of  some  of 
the  evils  of  private  property  with  some  exhortation,  at 
least  by  suggestion,  to  the  leisure  class  to  make  good 
use  of  their  position  of  vantage. 

The  conclusion  is  finally  reached  that  private  prop- 
erty, inequality,  and  the  leisure  class  will  long  con- 
tinue to  exist.  Chapters  Sixty-four  and  Sixty-five  dis- 
cuss this  general  subject  in  connection  with  socialism; 
but  no  new  conclusions  are  reached.  In  Volume  II 
landed  property  is  discussed,  and  the  conclusion  again 
is  reached  that  private  ownership  of  land  having  been 
already  recognised,  should  be  continued  so  far  as  agri- 
cultural land  is  concerned;  and  we  find  under  a  discus- 
sion of  urban  land  a  certain  favourable  attitude  toward 
measures  which  tend  to  bring  into  the  public  treasury 
increments  in  land  values  in  so  far  as  these  are  due  to 
general  social  influences.  We  may  say,  then,  in  con- 
clusion, that  we  do  not  find  anything  very  different  in 
Taussig  from  the  treatment  accorded  property  by  the 
classical  political  economy.  More  descriptive  matter 
is  given,  and  the  whole  discussion  is  more  realistic  so 
far  as  property  is  concerned.  Taussig  is  more  closely 
associated  with  Mill  than  with  any  other  English  writer, 
although  his  admiration  for  Marshall  is  evident.  It  is 
interesting  to  observe  that  Mill  was  used  by  Taussig 
in  his  own  classes  as  a  textbook  long  after  most  teachers 
felt  obliged  to  use  some  more  modern  writer.* 


Note  to  Appendix  to  Chapter  I 

1  P.  77.  For  the  latest  work  of  significance  on  the  subject  of  this 
appendix  the  reader  is  referred  to  Property,  Its  Rights  and  Duties — 
Historically,  Philosophically  and  Religiously  Regarded,  essays  by  Pro- 
fessor L.  T.  Hobhouse,  Canon  Rashdall,  Canon  Scott  Holland  and 
other  writers,  edited  by  the  Bishop  of  Oxford.  It  is  written  from  a 
sociological  and  ethical  point  of  view. 


78 


CHAPTER  II 

ILLUSTRATIONS  SHOWING  THE  IMPORTANCE  OF  PROPERTY 
IN   WEALTH   DISTRIBUTION 

First,  we  notice  that  in  our  present  socio-economic 
order  distribution  in  its  broadest  sense  is  wholly  a  ques- 
tion of  private  and  public  property.  If  we  should  abol- 
ish private  property,  we  would  not  have  the  present 
distribution  which  flows  from  private  property  as  its 
deepest  source;  for  with  the  abolition  of  private  prop- 
erty, distribution  would  become  a  public  function,  in- 
asmuch as  the  only  other  possible  substitute  is  public 
property,  and  this  necessarily  carries  with  it  distribu- 
tion as  a  public  process.  The  owner  of  property,  the 
general  public,  v/ould  then  have  to  bring  about  some 
sort  of  distribution.  But  we  do  not  now  take  up  the 
question  in  that  broad  sense.  On  the  contrary,  it  is 
desired  to  show  the  influence  that  a  modification  of  pri- 
vate property  through  the  extension  of  private  property 
or  the  restriction  of  private  property,  or  through  a 
change  in  the  intensivity  of  private  property,  must  have 
on  the  distribution  of  wealth.  We  may  take  up  several 
kinds  of  private  property  and  show  how  vast  the  changes 
are  which  can  be  reached  in  distribution  while  we  still 
keep  private  property  as  an  institution  and  modify  it  in 
extensivity  and  intensivity,  and  especially,  for  the  pres- 
ent purpose,  in  extensivity. 

79 


80    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Let  US  consider  an  illustration  which  readily  suggests 
itself  to  one  who  reflects  upon  the  distribution  of  prop- 
erty in  the  United  States.  It  is  said  that  the  first  Cor- 
nelius Vanderbilt,  who  founded  the  Vanderbilt  family, 
made  a  fortune  of  one  hundred  million  dollars  out  of 
railways,  and  it  is  said  that  he  made  it  legitimately,  it 
being  claimed  that  he  rendered  very  valuable  services 
to  the  country  and  that  these  services  were  worth  quite 
one  hundred  million  dollars  if  not  a  good  deal  more.  We 
are  not,  however,  concerned  with  his  economic  service 
at  the  present  time,  but  with  the  fact  that  through  rail- 
way construction  and  the  employment  and  manage- 
ment of  railway  property  in  one  way  or  another,  he 
acquired  a  fortune  of  one  hundred  million  dollars.  This 
fortune,  as  well  as  the  subsequent  fortunes  of  this  very 
wealthy  family,  grew  out  of  a  certain  kind  of  private 
property,  namely,  private  property  in  railways.  It  was 
that  institution,  a  product  of  law,  which  made  the  ac- 
quisition of  this  fortune  a  possibility.  If  instead  of  pri- 
vate property  in  railways  we  had  had  public  property, 
we  would  not  have  had  this  fortune.  This  does  not  say 
that  the  Vanderbilt  fortune  is  or  is  not  a  good  thing,  or 
that  in  some  other  way  this  family  might  not  have  be- 
come wealthy.  We  are  simply  studying  the  facts  of  the 
case.  To  bring  out  the  significance  of  private  prop- 
erty in  railways  in  the  United  States,  and  particularly 
in  New  York  State  where  the  fortune  was  chiefly  ac- 
quired, we  might  contrast  New  York  with  one  of  the 
German  States.  In  Wiirtemberg,  Germany,  the  rail- 
ways were  public  property  from  the  beginning  and  there 
was  no  opportunity  for  anyone  through  railway  owner- 


PROPERTY  AND  WEALTH  DISTRIBUTION  81 

ship  to  acquire  a  large  fortune,  because  the  railways 
were  managed  by  officials  receiving  small  salaries. 
There  was  in  Wiirtemberg  in  the  early  days  of  railways 
in  that  State  a  very  able  railway  manager  whose  serv- 
ices resembled  in  many  respects  those  of  the  first  Cor- 
nelius Vanderbilt,  because  the  essential  service  of  the 
first  Cornelius  Vanderbilt  consisted  in  railway  concen- 
tration and  unification.  One  of  the  most  important 
things  which  Vanderbilt  did  was  to  consolidate  many 
lines  into  the  great  New  York  Central  and  Hudson 
River  Line.  The  man  in  Wiirtemberg  referred  to  ef- 
fected a  real  unity  in  the  administration  of  the  railways 
in  that  State  and  developed  and  built  up  there  a  very 
excellent  railway  system;  and  his  salary  was  less  than 
$3,000  a  year.  But  let  us  say  that  he  received  $3,000  a 
year.  What  would  that  mean  capitalised?  Let  us  say 
$50,000,  although  that  is  an  overestimate  of  the  value 
of  a  $3,000  salary,  because  life  is  so  precarious.  So  that 
the  one  man  received  one  hundred  million  dollars  and 
the  other  man  say  fifty  thousand  dollars  for  his  services, 
which  is  as  two  thousand  to  one.  We  have  here,  it 
would  appear,  two  men  of  somewhat  the  same  char- 
acteristics, of  the  same  order  of  ability,  and  probably 
one  man  was  of  equal  integrity  with  the  other — we  have 
no  reason  to  suppose  otherwise — but  through  a  differ- 
ence in  property  we  have  a  vast  difference  in  distribu- 
tion. While  the  railway  interests  of  Wiirtemberg  are 
smaller  than  the  railway  interests  with  which  Mr.  Van- 
derbilt was  concerned,  this  difference  in  their  magni- 
tude is  not  at  all  in  proportion  to  the  difference  in  dis- 
tribution.^ 


82    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

And  now  we  may  take  an  illustration  in  which  Ger- 
many and  the  United  States  play  the  reverse  roles. 
During  our  entire  national  existence  the  post-office  has 
been  a  public  institution,  and  no  one  has  acquired  out 
of  post-office  property  and  management  a  large  fortune, 
although  many  men  have  rendered  distinguished  public 
services  in  post-office  work  in  the  United  States.  The 
Postmasters-General  have  received  salaries  scarcely 
sufficient  to  cover  living  expenses  according  to  the 
standard  of  life  imposed  upon  them  by  public  opinion, 
while  residing  in  the  capital  of  the  country.^  Some  of 
them  have  been  men  of  capacity  who  have  put  their  best 
talents  into  the  postal  service,  but  no  American  has 
ever  legitimately  acquired  a  fortune  through  connection 
with  the  postal  service,  and  probably  no  one  has  done 
so  illegitimately. 

Now  on  the  other  hand  the  postal  system  in  a  great 
part  of  Germany  and  in  a  large  part  of  the  continent  of 
Europe  was  for  centuries  a  private  institution  just  as 
American  railways  are,  and  the  great  postal  magnates, 
as  we  would  say,  of  the  continent  of  Europe  for  nearly 
four  hundred  years  were  men  who  belonged  to  the  fam- 
ily of  Thurn  and  Taxis.  The  family  grew  rich  and 
powerful  through  private  property  in  the  post-office, 
and  the  private  management  of  the  post-office  system. 
In  1460  one  Roger  von  Taxis  erected  the  first  post- 
office  in  the  Tyrol.  That  seems  to  be  the  beginning  of 
the  post-office  operations  of  this  family.  In  1595  the 
family  received  as  a  feudal  grant  the  imperial  post- 
office  in  the  Spanish  Netherlands.  In  1601  the  mem- 
bers of  the  family  became  imperial  counts,  and  in  1686 


PROPERTY  AND  WEALTH  DISTRIBUTION  83 

they  became  imperial  princes.  About  a  hundred  years 
later  the  family  acquired  by  purchase  four  principali- 
ties. In  1803  the  postal  property  and  services  of 
the  family  apparently  commenced  to  decline  because 
public  authority  began  to  encroach  upon  private  man- 
agement, and  the  family  lost  a  number  of  the  post- 
offices  in  the  Netherlands  on  the  left  bank  of  the  Rhine. 
For  this  they  had  to  have  an  indemnity  and  they  re- 
ceived therefor  a  principality,  and  in  1819  by  giving  up 
other  postal  rights  they  received  another  principality, 
and  still  another  in  1867  for  giving  up  further  postal 
rights;  then  in  the  last  named  year  by  giving  up  all 
rights  still  left,  they  received  nine  million  francs.  Their 
possessions  now  amount  to  730  square  miles,  making 
them  one  of  the  richest  and  most  powerful  families  in 
Europe,  and  they  became  so  through  private  property 
in  the  post-office.^ 

Here  we  have  two  contrasts,  in  the  United  States  a 
large  fortune  acquired  through  railways,  and  in  Europe 
an  enormous  fortune,  together  with  high  rank,  acquired 
through  the  post-office.  It  is  wonderful  to  trace  for 
four  hundred  years  the  progress  in  wealth  of  this  family, 
and  this  progress  rests  upon  private  property  in  the 
post-office.  Now,  what  would  have  happened  if  the 
post-office  and  its  management  had  been  a  public  func- 
tion for  these  four  hundred  years  all  over  Europe?  Of 
course  we  cannot  say.  Doubtless  a  family  of  such 
energy  as  this  would  elsewhere  have  acquired  wealth, 
but  the  wealth  that  they  did  acquire  rests  upon  the 
development  in  one  direction  of  the  institution  of  pri- 
vate property. 


84    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

As  another  example  we  may  take  up  the  telegraph 
in  the  United  States  and  show  how  fortunes  have  been 
acquired  directly  through  it.  The  telephone,  electric 
lighting  works,  and  street  railways  are  examples  of  cer- 
tain Hues  of  industry  which  are  sometimes  pubhcly  and 
sometimes  privately  owned  and  managed;  and  every 
difference  in  property  brings  about  a  corresponding 
difference  in  the  distribution  of  wealth.  Let  us  con- 
sider also  the  systems  of  water  supply  in  London  and 
New  York.  In  New  York  City  the  water  works  have 
been  public  property  for  a  very  long  time.  No  one  has 
acquired  a  fortune  through  the  public  ownership  of  the 
water  works,  but  the  water  works  have  tended  to  the 
broad  diffusion  of  well-being.  With  a  very  low  charge 
for  water  service  there  has  been  for  most  of  the  time  an 
abundant  supply  of  water  for  public  and  private  use. 
In  London,  however,  the  water  works  were  for  a  long 
time  private  property,  and  many  acquired  large  for- 
tunes through  those  water  works,  while  at  the  same  time 
complaint  was  formerly  made  that  the  people  were  fur- 
nished but  a  scanty  supply  of  poor  water.  However, 
the  Metropolitan  Water  Act  of  1902  authorised  the  pub- 
lic purchase  of  the  plants  of  the  eight  private  companies 
supplying  London  and  the  surrounding  districts  with 
water,  and  the  supply  is  now  pure  and  adequate. 

Now  it  may  be  argued  that  in  Germany  and  conti- 
nental Europe  while  the  family  of  Thurn  and  Taxis 
owned  the  post-office  business  it  was  so  much  better 
managed  than  it  could  have  been  in  earlier  ages  by  pub- 
lic authority  in  Europe,  that  there  was  on  the  whole  a 
pubUc  gain.    That  may  or  may  not  be  true.    And  the 


PROPERTY  AND  WEALTH  DISTRIBUTION  85 

same  may  be  said  of  the  railways  in  the  United  States 
and  England.  But  with  that  we  are  not  concerned  now. 
We  simply  want  at  the  present  time  to  show  the  influ- 
ence upon  the  distribution  of  wealth  of  certain  develop- 
ments of  public  and  private  property. 

Two  lists  of  rich  men,  lying  before  the  writer,  afford 
abundant  illustrations  of  the  influence  of  forms  of  pri- 
vate property  on  wealth  distribution.  The  one  list, 
published  by  the  New  York  Sun  in  1855,  contains  the 
names  of  wealthy  citizens  of  the  City  of  New  York,  and 
the  other  is  a  list  of  American  millionaires,  published 
by  the  New  York  Tribune  in  1892,  thirty-seven  years 
later.  Of  course  there  are  mistakes  in  both  hsts,  but 
in  a  rough  way  we  are  perhaps  not  far  wrong  if  we  let 
the  mistakes  in  the  one  offset  the  mistakes  in  the  other. 
There  is  a  general  tendency  to  exaggerate  fortunes,  but 
this  would  probably  be  as  apparent  in  one  list  as  in  the 
other. 

The  first  fact  which  would  attract  the  attention  of 
anyone  comparing  these  two  lists  is  the  immense  in- 
crease in  the  number  of  large  fortunes  which  has  taken 
place  during  this  period  of  thirty-seven  years,  and  the 
changes  in  the  idea  of  what  constitutes  a  large  fortune. 
In  1855,  $100,000  was  a  large  fortune  in  New  York  City, 
so  that  in  this  list  published  by  the  New  York  Sun  in 
1855  everyone  is  included  who  is  reputed  to  be  worth 
$100,000.  On  the  other  hand,  the  Tribune  list  includes 
only  millionaires.  The  contrast  is  more  marked  than 
might  appear  at  first,  because  the  Tribune  list  is  for  the 
entire  country  and  not  New  York  City  alone,  where  the 
concentration  is  far  greater  than  in  the  country  as  a 


86    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

whole.  Let  the  Httle  book  giving  the  Ust  for  1855  open 
where  it  will  and  glance  down  the  page.  It  opens  by 
chance  at  page  eight.  Here  we  find  no  fortune  of  one 
million  dollars,  and  on  the  next  page  likewise  we  find  no 
fortune  of  one  million  dollars.  The  highest  fortune 
mentioned  on  either  page  is  $800,000,  which  P.  T.  Bar- 
num  was  reputed  to  be  worth  at  that  time,  also  a  man 
by  the  name  of  Bartley  was  entered  for  the  same  figure. 
On  the  next  page  the  largest  fortune  is  $500,000,  on  the 
next  $600,000,  on  the  next  $300,000;  this  makes  five 
pages.  On  page  thirteen  mention  is  made  of  a  fortune 
of  one  and  a  half  millions,  which  James  Boorman  was 
said  to  be  worth.  So  it  is  only  on  one  of  the  six  pages 
examined  that  we  find  a  fortune  of  one  million  dollars. 
Turning  now  to  the  Tribune  list  we  find  very  readily, 
if  we  open  to  New  York  City,  men  whose  fortunes  are 
reputed  to  be  ten  millions,  twenty  millions,  fifty  mil- 
lions, and  even  more.  If  we  examine  further  into  this 
list  we  find  that  it  gives  the  reputed  sources  of  these 
great  fortunes.  The  New  York  Tribune  list  was  got 
together  in  order  to  prove  that  large  fortunes  were  not 
due  to  the  protective  tariff,  but  it  is  of  great  importance 
in  other  connections  than  that  of  the  protective  tariff, 
although  it  did  perhaps  prove  the  point  that  the  pro- 
tective tariff  is  not  the  chief  cause  of  large  fortunes. 
We  have  in  this  list  the  name  of  Westinghouse,  who 
made  his  fortune  out  of  patented  air  brakes;  Vander- 
grief,  whose  wealth  came  from  petroleum  investments; 
Shendley,  who  inherited  real  estate  which  increased  in 
value,  etc.,  etc.  Other  fortunes  were  made  in  differ- 
ent lines  of  industry:  The  Union  Transportation  Line, 


PROPERTY  AND  WEALTH  DISTRIBUTION  87 

rise  in  the  value  of  real  estate,  coke  manufacturing,  oil 
pipe  lines,  leather  tanning,  Pennsylvania  Railway  stock, 
private  bank  stock,  marble,  locomotive  building,  tele- 
graph companies,  and  telephones,  railway  stock  and  the 
management  of  railways  figuring  very  largely.  But  the 
sum  and  substance  of  it  all  is  this,  we  find  among  the 
sources  of  great  wealth  every  kind  of  property;  but 
public  utilities,  such  as  railways,  street  car  lines,  and 
telegraph  lines  and  natural  treasures,  such  as  oil,  min- 
erals and  forests,  are  especially  prominent  sources  of  the 
great  fortunes  of  the  country.  Real  estate  is  likewise 
frequently  mentioned,  but  apparently  has  not  been  so 
potent  a  source  of  great  fortunes. 

However,  we  have  not  merely  to  do  with  the  ques- 
tion of  private  property  versus  public  property  as  the 
cause  of  particular  kinds  of  distribution,  but  with  the 
conditions  under  which  private  property  is  held;  not 
only  with  the  extensivity  of  property  but  with  its  in- 
tensivity.  Consider,  for  instance,  franchises  as  a  source 
of  fortunes.  It  makes  a  difference  whether  they  are 
limited  or  unlimited.  The  mere  fact  that  a  franchise 
is  limited  exercises  an  influence  upon  the  distribution 
of  wealth.  To  illustrate  this  we  might  contrast  the 
management  of  street  car  lines  in  New  York  City  and 
in  Berlin.  In  New  York  the  street  car  lines  are  private 
property  and  are  largely  managed  by  private  corpora- 
tions with  unlimited  franchises.  More  recently,  how- 
ever, franchises  have  been  limited,  and  the  operations 
of  all  the  companies  are  under  the  general  control  of 
two  commissions.''  In  Berlin  they  are  strictly  limited, 
some  of  them  expiring  in  1911,  when  a  contract  was 


88    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

entered  into,  regulating  anew  the  time  for  which  the 
right  to  use  the  streets  was  granted  to  the  companies; 
also,  the  payments  from  the  companies  were  raised 
and  various  details  of  administration  were  dictated  by 
the  city.  The  result  is  that  while  the  street  cars  are  the 
source  of  large  fortunes  and  have  had  a  great  influence 
upon  the  distribution  of  wealth,  a  large  part  of  the 
franchise  value  that  has  gone  into  a  few  pockets  in  New 
York  City  will  in  Berlin  ultimately  go  into  the  public 
treasury  and  be  diffused  for  the  pubhc  good  in  low 
fares,  etc. 

Consider  also  the  New  Zealand  land  policy.  It  is 
the  policy  of  New  Zealand  to  substitute  leases  for  full 
private  property  rights,  and  to  bring  it  about  that  the 
increment  due  to  general  improvement  shall  flow  into 
the  general  treasury.  As  a  result,  if  we  should  look  over 
a  list  of  the  wealthy  citizens  of  New  Zealand  forty  or 
fifty  years  from  now,  provided  the  present  policy  con- 
tinues and  is  successful  in  achieving  its  purpose,^  we 
would  not  find  real  estate  playing  so  large  a  role  as  a 
source  of  large  fortunes  as  it  does  elsewhere. 

We  must  consider  also  the  laws,  which  do  not  regu- 
late private  property  itself,  but  the  modes  of  its  acqui- 
sition. These  are  a  different  thing  from  the  laws  which 
regulate  property,  and  have  an  immense  influence  upon 
the  distribution  of  wealth.  We  may  compare  France 
and  England  in  this  particular.  The  laws  of  inherit- 
ance in  England  have  been  designed  with  the  purpose 
of  bringing  about  to  a  certain  extent  the  concentration 
of  landed  property,  their  purpose  being  to  build  up 
great  families.^    In  France  since  the  time  of  the  Revo- 


PROPERTY  AND  WEALTH  DISTRIBUTION  89 

lution  the  aim  of  the  laws  of  inheritance  has  been  to 
bring  about  the  diffusion  of  property,  and  consequently 
the  bulk  of  the  property  is  divided  equally  among  the 
children,  instead  of  favouring  the  eldest  son  as  in  Eng- 
land; and  the  father  of  a  family  has  very  little  power 
over  the  distribution  of  his  property.'^  One  might  not 
think  that  in  two  or  three  generations,  other  things  re- 
maining the  same,  such  a  difference  in  laws  of  inherit- 
ance would  bring  about  a  great  change  in  the  distribu- 
tion of  property.  But  they  have  done  so.  They  have 
operated  ''continuously  and  silently"  to  quote  an  ex- 
pression used  by  Judge  John  F.  Dillon;  and  although 
the  laws  are  not  radical,  they  have  helped  bring  about 
an  immense  diffusion  of  property  in  France,  so  that 
real  estate  is  being  widely  distributed.  Agricultural 
France  is  for  the  most  part  cut  up  into  a  great  number 
of  small  farms,  although  some  parts  are  an  exception 
to  the  general  rule;  whereas  in  England  it  is  divided 
among  large  families;  so  that  the  ''continuous  and  silent 
operations"  of  these  laws  have  exercised  a  great  in- 
fluence upon  the  distribution  of  property,  sometimes 
in  one  direction,  sometimes  in  another.  Much  de- 
pends upon  what  the  laws  aim  at  accomplishing  and 
how  intelligently  they  are  framed.  Some  socialists, 
especially  the  earlier  ones,  have  proposed  to  introduce 
socialism  simply  through  the  action  of  the  laws  of  in- 
heritance, gradually  reducing  the  amount  of  private 
property  until  it  should  be  replaced  by  pubHc  property; 
and  socialism  would  thus  be  inaugurated. 

Even  the  laws  relating  to  mere  transfer  of  property 
other  than  by  descent  and  inheritance  have  also  an  im- 


90    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

portant  bearing  upon  distribution.  In  countries  where 
sale  and  transfer  of  land  are  involved  and  burdensome, 
there  is  less  traffic  in  real  estate  than  there  would  be 
otherwise  and  large  estates  are  encouraged.  Under  the 
common  law,  there  were  many  customs  of  feudal  origin 
that  have  burdened  and  still  burden  land  transfer  in 
England.    Blackstone  describes  these. 

In  Belgium,  transfers  of  land  have  been  hampered 
by  heavy  fees  on  deeds  and  by  various  charges.  At 
last  the  agitation  of  the  liberals  and  socialists  has  re- 
sulted in  lessening  the  payments  to  the  state  by  one- 
half,  in  the  case  of  workingmen  who  buy  land  in  the 
country  and  also  in  the  case  of  land  for  the  erection  of 
workingmen's  homes,  and  to  that  extent  transfers  have 
been  facilitated.  Nevertheless  the  total  charges  for 
transfers  are  still  very  high  and  in  the  case  of  an  ordi- 
nary transfer  of  property  valued  at  £500  would  amount 
to  8-1/3  per  cent.;  even  were  that  divided  in  two,  the 
charge  would  be  heavy.  As  transfers  in  Belgium  are 
frequent,  the  conclusion  is  reached  that  other  things 
may  more  than  counterbalance  heavy  charges  of  this 
kind.^  On  the  whole,  there  has  been  a  marked  tendency 
the  world  over  to  make  the  sales  of  land  approximate 
in  ease  the  sales  of  personal  property.  A  legislature 
may  crush  any  business  by  imposing  onerous  duties  on 
transfers. 

These  are  simply  illustrations  showing  the  influence 
of  particular  laws  of  property  and  laws  governing  the 
acquisition  of  property  upon  the  distribution  of  wealth. 
Now  if  we  have  fairly  grasped  the  import  of  these  illus- 
trations, it  becomes  clear  to  us  how  absolutely  impos- 


PROPERTY  AND  WEALTH  DISTRIBUTION  91 

sible  it  is  to  discuss  intelligently  and  thoroughly  the 
distribution  of  wealth  without  an  examination  into  the 
economic  aspects  of  private  property,  without  study- 
ing them  in  their  interrelations,  and  especially  without 
considering  quantitatively  and  qualitatively  the  rela- 
tions of  public  and  private  property. 

Perhaps  at  this  point  it  may  be  mentioned  as  a  bare 
suggestion  that  if  we  take  away  one  after  another  va- 
rious methods  of  acquiring  large  fortunes  there  will  be 
increasing  competition  in  the  fields  still  left  open  to  the 
great  industrial  leaders  and  that  they  may  be  expected 
to  render  their  services  under  conditions  more  advan- 
tageous to  the  general  public.  If  public  utilities,  etc., 
are  publicly  owned,  opportunities  for  vast  fortunes 
diminish.  But  international  relations  still  furnish  op- 
portunities, and  the  exploitation  of  backward  countries, 
etc.,  gives  us  many  a  ''twilight  zone"  where  there  is 
inadequate  social  control. 

But  the  enthusiastic  reformer  must  be  cautious  in 
drawing  practical  conclusions.  It  is  at  least  conceivable 
that  public  waste  and  civic  demoralisation  may  result 
from  this  suggested  extension  of  the  sphere  of  public 
action  and  narrowing  of  the  field  of  private  activity. 
Also,  it  must  be  considered  what  use  would  be  made  by 
organised  political  society  (state  in  the  generic  sense)  of 
the  potential  gains  of  public  industry.  Would  a  better 
use  be  made  of  wealth  as  a  whole  than  is  made  now? 


Notes  and  References  to  Chapter  II 

1  P.  81.  At  the  death  of  CorneUus  Vanderbilt  in  1877,  the  New 
York  Central  and  Hudson  River  Railway  was  978  miles  long;  with 
the  Harlem  Railway  and  side  lines  there  was  an  aggregate  of  2,128 
miles  under  one  management,  with  a  capital  value  of  $149,000,000, 
half  of  which  is  said  to  have  belonged  to  Vanderbilt  and  his  family. 
Poor's  Maiiual  of  Railroads  for  1912  gives  the  mileage  for  the  New 
York  Central  on  Dec.  31,  1911  thus:  Owned,  805.49  miles;  operated 
3,790.23  miles.  This  is  exclusive  of  lines  like  the  Lake  Shore  and 
Big  Four  which  are  controlled  by  the  Vanderbilt  interests.  The 
Statesman's  Year  Book  for  1912  states  that  on  March  31,  1911, 
Wurtemberg  had  2,039  kilometers  (1,264  miles)  of  publicly  owned 
railways. 

If  we  were  to  make  a  detailed  comparison,  we  should  have  to 
make  allowances  for  risk  incurred  by  private  capital  in  the  case  of 
CorneUus  Vanderbilt,  and  other  factors  would  enter  in. 

2  P.  82.  The  first  Postmaster-General  received  $1,000  a  year. 
The  present  incumbent  receives  $12,000  a  year;  each  of  his  four 
assistants,  $5,000  a  year. 

'P.  83.  For  brief  historical  sketch  of  this  family  see  Meyer's 
Konversationsleodkon. 

^  P.  87.  Two  or  three  franchises  granted  before  1875  (by  the 
State  legislature)  required  compensation.  The  general  street  rail- 
way law  of  1884  ensured  that  in  cities  of  250,000  or  more,  3%  of  the 
gross  receipts  for  the  first  five  years,  5%  thereafter,  should  go  to 
the  city.  From  1886  to  1897  franchises  were  sold  at  auction  to 
the  company  promising  to  pay  the  largest  percentage  of  gross  re- 
ceipts to  the  city.  This  plan  was  unsuccessful.  Franchises  limited 
to  fifty  years  with  revaluation  after  twenty-five  years  were  required 
and  municipal  ownership  made  lawful  by  the  Greater  New  York 
charter  in  1897. 

New  York  has  since  1905  had  a  municipal  bureau  of  franchises, 
which  undertakes  to  furnish  information  to  the  law  department  of 
the  city  and  the  Board  of  Estimate  and  Apportionment  regarding 
all  franchise  applications,  and  to  see  that  the  companies  live  up  to 
franchise  obligations.    Since  that  time  a  second  bureau  of  franchises 

92 


PROPERTY  AND  WEALTH  DISTRIBUTION  93 

has  been  established  under  the  Pubhc  Service  Commission  of  New 
York  City's  first  district,  so  that  now  all  new  franchises  must  be 
approved  by  two  commissions.  See  Wilcox,  Municipal  Franchises, 
Vol.  II,  Chap.  24. 

^  P.  88.  The  success  of  the  measure  is  extremely  problematical. 
Strong  pressure,  it  is  said,  is  being  brought  to  bear  by  pubhc  land 
tenants  to  have  their  leases  converted  into  fee-simple  titles;  or  to 
secure  leases  for  less  than  full  value;  and  if  the  tenants  prevail 
leases  may  be  the  source  of  individual  fortunes.  If  the  leases  call  for 
an  annual  rent  payment,  relatively  less  than  the  real  estate  taxes 
in  a  State  hke  Wisconsin,  they  would  to  that  extent  be  a  more  potent 
source  of  individual  fortunes.  And  American  experience  warrants 
us  in  believing  that  it  is  not  at  all  improbable  that  a  lease  system 
would  have  precisely  this  termination.  The  author  expects  to  deal 
at  greater  length  with  this  problem  in  the  volume  on  Landed  Prop- 
erty and  the  Rent  of  Land. 

We  find  speculation  in  leaseholds  in  London  and  they  may  be 
the  source  of  fortunes  there,  all  depending  upon  how  closely  con- 
tract rent  during  the  period  of  the  lease  approximates  economic 
rent. 

« P.  88.  This  is  well  brought  out  in  McCulloch,  On  Succession 
to  Property,  especially  in  Chap.  II  on  "  Influence  of  the  Law,  or  Cus- 
tom, of  Primogeniture." 

^  P.  89.  "A  man  can  only  dispose  of  a  half  of  his  property  by 
gift  inter  vivos  or  by  will  if  he  leaves  a  legitimate  child  surviving 
him.  If  he  leaves  two  children  he  can  only  dispose  of  a  third.  If  he 
leaves  three  or  more  he  can  only  dispose  of  a  quarter. 

"A  man  can  only  dispose  of  half  of  his  property,  either  by  dona- 
tion inter  vivos  or  by  will;  if,  though  he  has  no  children,  he  leaves 
one  or  more  ascendants  in  both  the  paternal  and  maternal  hues; 
and  can  dispose  of  only  three-quarters  if  he  leaves  ascendants  in 
only  one  line."  French  Civil  Code,  tr.  by  E.  Blackwood  Wright 
(1908),  §§  913,  914. 

8  P.  90.  Rowntree,  Land  and  Labour:  Lessons  from  Belgium, 
pp.  61-66. 


CHAPTER  III 

PROPERTY  DEFINED  AND  DESCRIBED 

We  have  been  discussing  property  and  it  has  been 
assumed  that  the  reader  understands  what  property  is. 
While  it  has  been  described  in  a  general  way,  no  formal 
definition  of  it  has  been  offered. 

I.   THE   DEFINITION   OF   PROPERTY 

Property  is  traced  back  by  many  to  the  distinction 
between  persons  and  things.  Philosophical  writers, 
seeking  ultimate  causes,  frequently  find  a  foundation 
for  property  in  this  distinction  between  persons  and 
things;  the  person  having  will  and  things  being  without 
will.  Things  without  will,  it  is  said,  are  under  the  abso- 
lute control  of  men  with  will.  It  is  the  purpose,  the 
function,  the  design  of  things  to  serve  persons  with 
wills,  because  things  have  no  purpose  of  their  own. 
This  thought  is  elaborated  by  a  German  writer  in  the 
following  quotation:  "The  concept  property  rests  in 
its  final  analysis  in  the  opposition  between  person  and 
thing.  The  thing,  because  it  is  without  will,  is  destined 
to  be  governed  by  the  person  with  will.  This  rulership 
is  in  itself  unlimited  j  it  reaches  just  as  far  as  it  is  physi- 
cally possible  to  exercise  it.  But  it  admits  of  limita- 
tions without  changing  its  nature,  and  it  is  just  as  im- 

94 


PROPERTY  DEFINED  AND  DESCRIBED  95 

possible  for  the  legal  order  to  renounce  the  limitation 
of  the  right  of  control  over  the  single  thing,  as  it  is  to 
fail  to  admit  that  in  itself  this  right  of  control  is  with- 
out limits."  ^ 

A  similar  thought  is  found  in  Blackstone,  who  says: 
''In  the  beginning  of  the  world,  we  are  informed  by 
Holy  Writ,  the  all-bountiful  Creator  gave  to  man  'do- 
minion over  all  the  earth;  and  over  the  fish  of  the  sea, 
and  over  the  fowl  of  the  air,  and  over  every  living  thing 
that  moveth  on  the  earth.'  This  is  the  only  true  and 
solid  foundation  of  man's  dominion  over  external  things, 
whatever  airy  metaphysical  notions  may  have  been 
stated  by  fanciful  writers  upon  this  subject."  ^ 

While  one  statement  is  characteristically  English 
and  the  other  is  characteristically  German,  they  are 
really  the  same  statement  in  different  forms  and  both 
mean  the  same  thing.  One  traces  back  this  distinction 
to  Holy  Writ  and  the  decrees  of  the  all-bountiful  Cre- 
ator, and  the  other  makes  the  distinction  turn  upon  will. 

Both  definitions  imply,  however,  that  property,  what- 
ever its  first  source,  has  to  do  with  relations  among  men, 
and  that  its  purpose  is  to  subserve  human  welfare.  One 
man  or  an  association  of  men  may  own  property,  be- 
cause property  has  to  do  with  relations  among  men. 
Slaves  cannot  own  property,  however,  because  they  are 
not  full  human  beings.  As  they  are  simply  chattels, 
they  cannot  enjoy  full  rights  of  property.  Wlien  they 
have  seemed  to  own  property,  it  has  been  only  by  grace, 
and  their  rights  have  necessarily  been  even  at  best  mu- 
tilated and  imperfect.  Chattels  and  things  cannot  own 
property.    The  case  of  a  tree  in  Athens,  Georgia,  which 


96    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

is  erroneously  said  to  own  itself  and  the  plot  of  ground 
around  it,  illustrates  the  absurdity  of  making  property, 
in  itself,  a  fetish  independent  of  all  human  relations.  A 
typical  notice  of  this  tree  reads  as  follows: 

''  A   TREE   THAT   OWNS   LAND 

"There  is  a  tree  in  Athens,  Georgia,  which  is  a  property- 
holder.  In  the  early  part  of  the  century  the  land  on  which 
it  stands  was  owned  by  Col.  W.  H.  Jackson,  who  took  great 
delight  in  watching  its  growth  and  enjoying  its  shade.  In 
his  old  age  the  tree  had  reached  magnificent  proportions, 
and  the  thought  of  its  being  destroyed  by  those  who  would 
come  after  him  was  so  repugnant  that  he  recorded  a  deed  con- 
veying to  it  all  the  land  within  a  radius  of  eight  feet  of  it." 

Of  course  the  kind  owner  of  the  tree,  who  was  an 
educated  man,  realised  that  the  tree  could  not  own 
land.^ 

But  what  has  been  said  about  the  subserviency  of 
things  to  persons  does  not  carry  us  very  far.  We  find 
this, — that  things  exist  for  the  sake  of  persons;  we  find 
established  a  human  control  over  things.  But  the 
essence  of  property  is  more  than  this.  The  essence  of 
property  is  in  the  relations  among  men  arising  out  of 
their  relations  to  things. 

We  have  not  got  property  when  we  establish  human 
control  over  things.  That  can  be  exercised  by  com- 
munities recognising  no  private  property;  for  example, 
tribes  of  a  primitive  economic  type  and  communistic 
settlements.  In  various  ways  associations  of  men  may 
exercise  control  over  things,  but  property  means  the 
relations  which  exist  between  men  arising  out  of  their 


PROPERTY  DEFINED  AND  DESCRIBED  97 

relations  to  things,  and  in  the  case  of  slavery,  their  re- 
lations to  men  who  are  treated  as  things.  So  that  we 
have  not  gone  very  far  when  we  say  that  property  is 
the  human  control  over  things. 

Several  distinctions  must  be  made  before  we  proceed 
further.  We  all  know  that  there  are  many  things  in 
this  world  which  are  of  such  a  character  that  they  are 
capable  of  satisfying  human  wants  and  that  these  are 
called  goods.  Some  of  these  goods  are  called  free,  but 
it  is  generally  overlooked  that  we  have  two  allied  and 
yet  different  concepts,  designated  as  ''free  goods". 
One  of  these  concepts  is  economic,  the  other  legal.  In 
economics  we  regard  as  free  those  goods  which  exist  in 
quantities  sufficient  to  satisfy  all  wants  and  are  conse- 
quently without  value,  while  economic  goods  are  those 
which  have  value  because  they  are  so  limited  in  supply 
that  some  wants  must  go  unsatisfied.  But  in  the  legal 
sense  free  goods  are  those  goods  that  are  under  no  re- 
strictive and  exclusive  control  and  are  open  to  all  for 
use  and  enjoyment. "^  Now  it  is  with  free  goods  in  the 
legal  sense  that  we  are  primarily  concerned  in  this 
chapter;  and  we  distinguish  these  goods  from  those 
goods  which  are  objects  of  property.  Very  often  the 
two  concepts  coincide  but  not  always.  Many  goods  are 
free  for  appropriation,  wild  growing  fruit,  game  in  new 
countries,  etc.,  which  nevertheless  are  so  limited  that 
they  cannot  satisfy  all  wants.  These  are  economic 
goods.  And  when  labour  is  required  for  appropriation 
of  goods  existing  in  superabundance,  the  appropriated 
goods  become  economic.  We  may  indicate  one  classi- 
fication as  follows: 


98    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Economic  Legal 

I.  Free  Goods  h°*P°"P™P'='''y 
(potential  property 


II.  Economic  Goods 


not  property 

property 

Doubtless  a  more  elaborate  classification  and  various 
modifications  could  be  made,  if  different  points  of  view 
were  taken,  but  this  is  sufficient  for  present  purposes 
and  should  prevent  confusion.  Free  goods  change  in 
number  and  importance,  and  the  tendency  of  advanc- 
ing civilisation  is  to  restrict  them  in  number  and  in 
importance.  But  still  we  have  free  goods  in  consider- 
able abundance;  for  example,  air,  sunshine,  and  in 
many  countries  land,  great  bodies  of  water,  wild  ani- 
mals, herbs,  etc.  Fish  are  generally  considered  free 
goods,  although  according  to  the  English  and  American 
law,  strictly  speaking,  they  are  owned  by  the  state  and 
are  its  property.  That  is  the  legal  idea,  but  the  state 
frequently  does  not  make  actual  property  of  them, 
because  property  means  control.  They  are  economi- 
cally objects  of  potential  property.  The  state  may 
exercise  control  over  fish  and  game,  as  it  very  generally 
does  in  older  and  more  densely  populated  countries; 
then  they  are  public  property.  But  in  the  United 
States  they  are  usually  treated  practically  as  free  goods, 
although  they  are  according  to  law  the  property  of  the 
state.  This  has  been  decided  in  American  courts  many 
times.  The  following  is  one  among  many  cases  which 
might  be  cited: 

"Suit  was  brought  by  the  Willow  River  Club,  composed 


PROPERTY  DEFINED  AND  DESCRIBED  99 

of  St.  Paul  capitalists,  who  bought  several  hundred  acres 
of  land  in  this  vicinity  for  fishing  purposes.  Twelve  cases 
were  brought  on  the  September  term  against  residents  for 
fishing  on  private  grounds.  Judge  Bundy  decided  against 
the  club  and  holds  that  'it  has  been  the  settled  law  of  this 
country  ever  since  the  landing  of  the  Pilgrim  Fathers,  that 
the  fish  belong  to  the  state  for  the  benefit  of  the  people.' 
The  decision  meets  with  general  approval."^ 

In  the  case  of  Geer  v.  Conn.,  161  U.  S.  519  (1896), 
a  somewhat  similar  question  was  considered.  The 
question  here  was  of  the  constitutionality  of  the  General 
Statute  of  Connecticut  (sec.  2546)  forbidding  the  kill- 
ing ''of  any  woodcock,  ruffled  grouse  or  quail  for  the 
purpose  of  conveying  the  same  beyond  the  limits  of  this 
State;  or  the  transporting,  or  having  in  possession  with 
intent  to  transport"  such  fowl  beyond  the  limits  of  the 
State. 

The  United  States  Supreme  Court,  speaking  through 
Mr.  Justice  White,  upheld  the  constitutionality  of  this 
statute  in  these  words: 

"The  foregoing  analysis  of  the  principles  upon  which  alone 
rests  the  right  of  an  individual  to  acquire  a  qualified  owner- 
ship in  game,  and  the  power  of  the  State,  deduced  therefrom, 
to  control  such  ownership  for  the  common  benefit,  clearly 
demonstrates  the  validity  of  the  statute  of  the  State  of 
Connecticut  here  in  controversy.  The  sole  consequence 
of  the  provision  forbidding  the  transportation  of  game, 
killed  within  the  State,  beyond  the  State,  is  to  confine  the 
use  of  such  game  to  those  who  own  it,  the  people  of  that 
State.  .  .  .  The  qualification  which  forbids  its  removal 
from  the  State  necessarily  entered  into  and  formed  part  of 
every  transaction  on  the  subject,  and  deprived  the  mere 
sale  or  exchange  of  these  articles  of  that  element  of  freedom 


100    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  contract  and  of  full  ownership  which  is  an  essential  attri- 
bute of  commerce."^ 

Notice  the  expression  ''qualified  property".  All 
this  indicates  a  growing  public  control,  and  that  in 
reality  the  potential  public  property  is  becoming  actual ; 
it  is  incipient  public  property.  We  return  presently  to 
the  conception  of  qualified  property.^ 

Economically  and  strictly,  however,  fish  and  game 
in  Wisconsin  and  generally  in  our  American  States  are, 
as  already  seen,  not  property  at  all.  That  is,  they  are 
treated  as  free  goods  and  the  State  insists  that  they 
shall  be  so  treated.  Of  course  the  State  of  Wisconsin 
may  do  what  an  older  state  like  Prussia  does,  and  exercise 
such  a  strict  control  over  them  that  they  would  become 
actual  public  property. 

Thus  we  have  a  distinction  between  free  goods  over 
which  no  restrictive  control  is  exercised  and  those  over 
which  the  state  holds  control  to  the  extent  that  it  will 
not  allow  private  persons  to  gain  exclusive  control  over 
them. 

Objects  over  which  the  rights  of  property  extend  are 
objects  conceived  of  as  taken  out  of  the  mass  of  free  goods 
and  brought  under  the  exclusive  control  of  a  person,  and 
this  control  is  called  property. 

It  is  stated  that  objects  over  which  property  rights 
are  extended  are  conceived  of  as  taken  out  of  the  mass 
of  free  goods.  This  is  a  frequent  historical  procedure, 
for  legal  and  economic  history  reveals  an  ever  narrow- 
ing field  of  free  material  goods;  but  it  is  nevertheless  true 
that  in  an  advanced  economic  society  most  objects  of 
property  were  never  free  goods,  but  are  the  outcome  of 


PROPERTY  DEFINED  AND  DESCRIBED  101 

human  effort  applied  to  land  which  has  long  been  prop- 
erty, and  to  capital  goods  which  are  also  property  ob- 
jects, and  the  products  are  therefore  themselves  from 
the  beginning  under  that  exclusive  control  called  prop- 
erty. Our  statement,  therefore,  is  a  logical  and  phil- 
osophical extension  of  actual  historical  truth. 

The  exclusive  control  spoken  of  may  be  public  or 
private.  If  the  control  is  vested  in  a  political  unit,  as 
a  city,  state,  or  nation,  then  it  is  public  property;  but 
if  it  is  vested  in  a  private  individual  or  group  of  indi- 
viduals (e.  g.  a  company)  then  it  is  private  property. 
That  is  where  we  make  our  beginning  in  distribution.  We 
have  free  goods;  out  of  this  mass  objects  are  taken,  and 
over  these  objects  control  is  exercised  by  a  person,  and 
this  is  property. 

Now  we  notice  little  movement  in  the  opposite  di- 
rection. As  a  general  rule  civilisation  does  not  move 
forward  in  a  straight  line,  but  returns  upon  itself.  To 
use  a  trite  comparison,  its  growth  is  a  spiral.  And  in 
the  case  of  free  goods  we  notice  little  movement  away 
from  restriction  of  the  mass  of  free  goods  in  the  direc- 
tion of  the  enlargement  of  the  mass  of  free  goods;  but 
a  movement  towards  an  enlargement  of  public  property 
accomplishes  a  result  analogous  to  that  which  free  goods 
accomplished  in  an  earlier  civilisation;  but  of  this  much 
more  will  be  said  later. 

But  let  us  have  more  formal  definitions: 

By  property  we  mean  an  exclusive  right  to  control  an 
economic  good. 

By  private  property  we  mean  the  exclusive  right  of  a 
private  person  to  control  an  economic  good. 


102    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

By  public  property  we  mean  the  exclusive  right  of  a  po- 
litical unit  {city,  state,  nation,  etc.)  to  control  an  economic 
good. 

Qualified  property.  As  we  have  already  seen,  this  is 
something  between  free  goods  and  goods  over  which 
full  property  rights  are  normally  and  regularly  extended. 
These  goods  are  mobilia,  or,  to  use  the  term  of  our  own 
law,  '^ chattels  personal",  although  there  may  well  be 
conditions  in  which  land  occupies  this  halfway  position 
provisionally  only.  But  land  is  an  appropriate  object 
of  property  by  its  own  nature,  whereas  those  objects 
which  give  us  our  types  of  qualified  property  are  things 
of  which  the  private  appropriation  involves  certain  spe- 
cial difficulties.  In  Kent's  Commentaries  on  American 
Law  we  find  these  definitions:  '^Property  in  chattels  per- 
sonal is  either  absolute  ^  or  qualified.  Absolute  property 
denotes  a  full  and  complete  title  and  dominion  over  it; 
but  qualified  property  in  chattels  is  an  exception  to  the 
general  right,  and  means  a  temporary  or  special  in- 
terest, liable  to  be  totally  devested  on  the  happening 
of  some  particular  event."  ^ 

Four  main  kinds  of  qualified  property  are  wild  ani- 
mals, air,  light,  and  water.  Occupancy  may  make 
these  property  and  actually  does  so  under  many  con- 
ditions, but  occupancy  needs  to  be  defined  and  the 
escape  from  an  exercised  control  as  in  the  case  of  wild 
animals  is  an  event  which  works  a  loss  of  property 
right.  Yet  here,  as  in  general,  we  observe  a  tendency 
towards  a  development  of  half  rights  into  full  rights, 
for  example,  water.  Into  all  the  legal  complexities  of 
this  halfway  station  we  cannot  enter  in  this  place.    To 


PROPERTY  DEFINED  AND  DESCRIBED  103 

notice  and  describe  briefly  its  existence  is  sufficient  for 
present  purposes.  ^° 

In  various  dog  cases  the  courts  have  held  that  a  dog 
is  not  strictly  private  property  and  yet  not  on  the  same 
plane  with  wild  animals.  An  interesting  exemplifica- 
tion of  this  halfway  station,  of  this  qualified  property, 
is  found  in  a  case  that  was  appealed  from  the  Court  of 
Appeals  for  the  Parish  of  Orleans,  the  case  Sentell  v. 
New  Orleans  and  Carrollton  Railroad  Co.^^ 

A  valuable  Newfoundland  dog  owned  by  Mr.  Sentell 
was  killed  by  an  electric  car  on  the  line  of  the  New 
Orleans  and  Carrollton  Railroad  Co.  Mr.  Sentell  sued 
for  damages  in  the  Civil  District  Court,  and  they  were 
granted.  The  Court  of  Appeals  reversed  the  decision 
and  was  supported  in  the  reversal  by  the  United  States 
Supreme  Court.  The  reversal  was  based  on  proof  that 
Mr.  Sentell  had  not  complied  with  the  State  law,  which 
required  that  the  dog  be  placed  upon  the  assessment 
rolls  before  its  owner  was  entitled  to  the  protection  of 
the  law. 

Mr.  Justice  Brown  gave  the  opinion  of  the  Supreme 
Court,  saying  in  part, 

"The  very  fact  that  they  are  without  the  protection  of 
the  criminal  laws  shows  that  property  in  dogs  is  of  an  imper- 
fect or  qualified  nature,  and  that  they  stand,  as  it  were,  be- 
tween animals  Jeroe  naturce  in  which,  until  killed  or  subdued, 
there  is  no  property,  and  domestic  animals,  in  which  the  right 
of  property  is  perfect  and  complete.  They  are  not  considered 
as  being  upon  the  same  plane  with  horses,  cattle,  sheep 
and  other  domesticated  animals,  but  rather  in  the  category 
of  cats,  monkeys,  parrots,  singing  birds  and  similar  animals 
kept  for  pleasure,  curiosity  or  caprice.     They  have  no  in- 


104     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

trinsic  value,  by  which  we  understand  a  value  common  to 
all  dogs  as  such,  and  independent  of  the  particular  breed  or 
individual.  Unlike  other  domestic  animals,  they  are  useful 
neither  as  beasts  of  burden,  for  draught  (except  to  a  limited 
extent),  nor  for  food.  .  .  .  Acting  upon  the  principle  that 
there  is  but  a  qualified  property  in  them,  and  that,  while 
private  interests  require  that  the  valuable  ones  shall  be  pro- 
tected, public  interests  demand  that  the  worthless  shall  be 
exterminated,  they  have,  from  time  immemorial,  been  con- 
sidered as  holding  their  lives  at  the  will  of  the  legislature, 
and  properly  falling  within  the  police  powers  of  the  several 
States." 

The  fact  that  dogs  are  without  the  full  protection  of 
the  law  shows  that  they  stand  between  those  animals  in 
which  there  is  no  property  right  and  those  in  which  the 
right  of  property  is  complete.  It  would  require  some 
special  act  to  make  them  property.  In  the  case  of  the 
dog  it  was  assessment.  In  the  case  of  a  cow  that  would 
not  be  necessary.  The  right  of  the  legislature  to  enact  a 
law  that  the  cow  should  not  be  regarded  as  property 
would  not  be  recognised,  but  would  be  considered  un- 
constitutional as  invading  the  right  of  property,  be- 
cause in  domestic  animals  the  right  of  property  is  com- 
plete. Thus  when  the  license  is  paid  and  a  tag  affixed 
to  a  dog  the  right  of  property  is  complete.  But  by  a 
process  of  evolution,  similar  to  that  so  frequently  ob- 
served in  the  development  of  property,  qualified  prop- 
erty in  the  case  of  dogs  tends  to  ripen  into  full  property, 
as  is  shown  in  recent  decisions. 

This  illustration  shows  that  there  is  something  be- 
tween property  and  free  goods;  although  it  has  compar- 
atively little  present  practical  importance  or  scientific 


PROPERTY  DEFINED  AND  DESCRIBED  105 

interest,  nevertheless  it  has  significance  as  an  illustra- 
tion of  a  growth  from  free  goods  to  full  property. 

One  or  two  other  definitions  of  property  may  now 
occupy  our  attention.  Blackstone  says  ^-  that  property 
is  ''that  sole  and  despotic  dominion  which  one  man 
claims  and  exercises  over  the  external  things  of  the 
world  in  total  exclusion  of  the  right  of  any  other  indi- 
vidual in  the  universe." 

Here  we  note  a  tendency,  characteristically  English 
perhaps,  to  exaggerate  somewhat  the  idea  of  property, 
although  undoubtedly  it  is  correct  in  the  main.  Black- 
stone  says,  ''the  sole  and  despotic  dominion";  but  the 
word  despotic  really  does  not  belong  to  the  idea  of  prop- 
erty; on  the  contrary  it  impHes  something  which  does 
not  exist,  as  we  shall  presently  see.  Notice  also  the 
undue  emphasis  found  in  the  word  "universe".  The 
exclusion  of  all  individuals  in  this  world  of  ours  is  surely 
quite  adequate. 

In  Bouvier's  Law  Dictionary  property  is  defined  as 
"the  right  and  interest  which  a  person  has  in  land  and 
chattels  to  the  exclusion  of  others." 

Notice  also  a  definition  taken  from  the  Austrian 
Civil  Code  which  is  quite  similar,  "Everything  which  be- 
longs to  anyone,  all  his  corporeal  or  incorporeal  things, 
are  called  his  property.  Regarded  as  a  right,  property 
is  the  liberty  to  do  with  the  substance  and  uses  of  a 
thing  according  to  one's  wants  and  desires  and  to  ex- 
clude every  other  person  therefrom."  ^^ 

The  definition  given  by  Raleigh  in  his  Outline  of  the 
Law  of  Property  is  of  importance  because  it  brings  out 
the  idea  of  complexity  which  has  already  been  men- 


106    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

tioned.  "Full  ownership  ('dominium'),"  he  says,  "is 
a  complex  whole  made  up  of  many  rights;  right  to  pos- 
sess, right  to  use  and  destroy,  right  to  sell  and  give 
away,  right  to  lend  and  let  for  hire,  etc."  ^^  The  sig- 
nificance of  this  definition  is  the  bundle  of  rights  to 
which  reference  has  already  been  made.  It  is  to  be 
noticed  that  after  his  enumeration  of  separate  rights 
he  adds  "et  cetera";  he  does  not  pretend  to  enumerate 
all.  About  the  right  to  destroy  we  will  have  something 
more  to  say  presently.  ^^ 

The  following  four  definitions  of  property  by  Amer- 
ican courts  may  be  regarded  as  typical  and  are  cited  as 
bringing  out  points  of  interest  and  importance: 

"The  exclusive  right  of  possessing,  enjoying  and  dis- 
posing of  a  thing."  McKeon  v.  Bisbee,  9  Cal.  137 
(1858). 

"The  interest  one  may  have  in  lands  or  chattels,  to 
the  exclusion  of  others."  Wilson  v.  Harris,  21  Mont. 
374  (1898). 

"The  highest  right  a  man  can  have  to  anything; 
(the  word)  being  used  for  that  right  which  we  have  both 
to  lands  or  tenements,  goods  or  chattels,  which  no  way 
depends  on  another  man's  courtesy."  Jackson  v.  Hou- 
sel,  17  Johns.  (N.  Y.)  281  (1820). 

"The  right  of  acquiring  and  possessing  property  and 
having  it  protected,  is  one  of  the  natural,  inherent,  and 
inalienable  rights  of  man.  Men  have  a  sense  of  prop- 
erty; property  is  necessary  to  their  subsistence,  and 
correspondent  to  their  natural  wants  and  desires;  its 
security  was  one  of  the  objects  that  induced  them  to 
unite  in  Society.    No  man  would  become  a  member  of  a 


PROPERTY  DEFINED  AND  DESCRIBED  107 

community,  in  which  he  could  not  enjoy  the  fruits  of 
his  honest  labor  and  industry.  The  preservation  of  prop- 
erty, then,  is  a  primary  object  of  the  social  compact." 
Mr.  Justice  Patterson,  in  Van  Home  v.  Dorrance,  2  Dall. 
304  (1795). 

This  last  definition  illustrates  a  tendency  to  find  an 
ideal,  super-social  and  humanly  uncontrollable  foun- 
dation of  property.  It  rests  upon  an  unscientific 
eighteenth  century  social  philosophy  of  natural  rights 
existing  prior  to  the  formation  of  society  and  of  a  com- 
pact whereby  men  left  a  state  of  nature,  surrendering 
liberties  for  the  sake  of  protection  and  other  advan- 
tages; and  binding  forever  all  subsequent  generations  by 
their  alleged  voluntary  compact.  All  this  has  long  ago 
been  totally  discredited  by  science.  ^^ 

When  we  use  the  word  property  we  generally  refer 
to  private  property,  but  we  must  remember  that  there 
is  public  property  as  well  as  private  property.  Political 
units  have  a  control,  and  public  property  is  a  very  dif- 
erent  thing  from  free  goods,  because  the  laws  of  prop- 
erty, as  for  instance  those  regarding  theft,  apply  quite 
as  stringently  to  public  as  to  private  property,  some- 
times even  more  so.  The  sharpness  of  the  law  of  public 
property  in  the  post-office  is  well  known. 

It  is  one  of  the  great  defects  of  current  treatments  of 
property  that  the  concept  public  property  has  been 
inadequately  treated  by  economists  and  publicists 
generally,  with  the  result  that  false  and  one-sided  con- 
clusions have  been  drawn,  and  as  a  reaction  from  the 
harshness  of  one-sided  and  extreme  concepts  of  private 
property  we  have  the  opposition  of  economic  radicals 


108    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  private  property.  Distribution  depends  on  public 
as  well  as  private  property,  and  the  interrelations  of 
these  two  are  vital  in  any  given  distribution  of  wealth." 
' '  But  it  must  be  borne  in  mind  that,  strictly  speaking, 
property  refers  to  rights  only.  Property  is  an  exclu- 
sive right.  Speaking  accurately,  then,  property  is  not 
a  thing  but  the  rights  which  extend  over  a  thing.  A 
less  strict  use  of  the  word  property  makes  property  in- 
clude the  things  over  which  the  right  extends.  We  say 
of  a  farm,  this  is  my  property,  meaning  the  land  and 
improvements  on  it  and  not  merely  the  right,  or  rather, 
the  land  and  its  improvements  together  with  the  right. 
But,  strictly  speaking,  property  is  the  right,  and  not 
the  object  over  which  the  right  extends. ^^  ^^ 


Notes  and  References  to  Chapter  III 

1  P.  95.  "Der  Begriff  des  Eigentums  beruht  in  seinem  letzten 
Grunde  auf  dem  Gegensatze  zwischen  Person  und  Sache.  Die 
Sache  hat,  weil  sie  willenlos  ist,  die  Bestimmung,  von  der  willens- 
fahigen  Person  beherrscht  zu  werden.  Diese  Herrschaft  ist  an  sich 
unbegrenzt;  sie  reicht  so  weit  wie  die  physisciie  Moglichkeit,  sie 
zu  iiben.  Aber  sie  gestattet  Einschrankungen,  ohne  ihr  Wesen  zu 
andern,  und  die  Rechtsordnung  kann  auf  die  Begrenzung  der  recht- 
lichen  Macht  iiber  die  einzelne  Sache  ebensowenig  verzichten,  wie 
sie  die  Anerkennung  dieser  Macht  als  einer  an  sich  schrankenlosen 
sich  zu  entziehen  vermag."  R.  Johow,  Entwurf  eines  biirgerlichen 
Gesetzbuches  fiir  das  Deutsche  Reich.  Begriindung  Sachenrecht  (Ber- 
lin, 1890)  Vol.  I.  Quoted  by  H.  von  Scheel,  in  article  "Eigentum," 
Handworterhuch  der  Staatswissenschaften. 

2  P.  95.  Blackstone's  Commentaries  on  the  Laws  of  England. 
Bk.  II,  Chap.  11. 

3  P.  96.  The  paragraph  quoted  is  taken  from  the  Rochester 
Democrat  and  appeared  in  the  Evening  Wisconsin,  Milwaukee, 
March  31,  1895,  The  author  is  indebted  to  Professor  Sylvanus 
Morris,  Dean  of  the  Law  Department  of  the  University  of  Georgia, 
for  the  real  history  of  this  case,  and  for  the  following  interesting 
account: 

"The  tree  stands  on  land  once  owned  by  Mr,  W,  H,  Jackson. 
His  admiration  for  it  led  him  to  adopt  a  unique  method  of  preserv- 
ing it.  He  made  what  is  called  a  deed  to  the  tree,  conveying  the  land 
it  occupies.    It  reads  as  follows: 

"  '  For  and  in  consideration  of  the  great  love  I  bear  this  tree  and 
the  great  desire  I  have  for  its  protection  for  all  time  I  convey  entire 
possession  of  itself  and  all  land  within  eight  feet  of  the  tree  on  all 
sides. 

"  '  (Signed)  William  H,  Jackson,' 

"The  original  deed  was  not  registered,  of  course,  and  is  now  lost, 
and  the  contents  were  obtained  from  those  who  read  it.  However, 
this  deed  was  not  executed  according  to  law  and  does  not  purport 
to  convey  the  land  but  possession  only.  Of  course,  he  (Mr.  Jackson) 
knew  perfectly  well  the  tree  could  not  own  land.    He  was  an  edu- 

109 


110    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

cated  man  and  I  think  an  LL.  D.  of  the  University.  This  was  about 
1820.  .  .  .  His  wishes  have  been  respected.  Findlay  Street  was 
opened,  and  the  tree  stands  in  the  street.  It  is  an  immense  white 
oak,  and  up  to  a  few  years  ago,  when  damaged  by  sleet,  was  as 
symmetrical  as  any  I  ever  saw.  ...  A  few  years  ago  George 
Foster  Peabody  had  an  enclosure  of  granite  posts  and  iron  chains 
put  around  it,  and  a  white  marble  block  set  up,  with  the  words  of 
the  so-called  deed  carved  on  it.  Every  handbook  of  Athens  con- 
'tains  descriptions,  and  there  are  numerous  pictures,  engravings, 
and  photographs."  Communications  from  Professor  Sylvanus 
Morris  to  the  writer,  November  1  and  12, 1912. 

*  P.  97.  We  have  to  distinguish  at  times  between  legal  theory 
and  actuality.  Public  domain  may  virtually  be  a  free  good,  yet  not 
a  free  good  in  legal  theory;  so  forests  in  mountains,  so  fish  in  streams. 
We  return  to  this  later  on. 

5  P.  99.  Madison  Democrat,  December  5,  1895,  dated  "Hudson, 
Wisconsin,  November  27."  The  decision  was  rendered  by  the 
Circuit  Court  and  the  case  never  reached  the  Supreme  Courts  and 
consequently  no  record  of  it  is  found  in  the  Wisconsin  Supreme 
Court  Reports.  But  a  case  on  the  general  subject  of  state  control 
over  fish  was  decided  by  the  Wisconsin  Supreme  Court  in  1896, 
Bittenhaus  v.  Johnson,  92  Wis.  588  (1896).  In  this  case  nets  used 
for  illegal  fishing  were  confiscated  by  the  State,  and  the  law  was 
upheld. 

^  P.  100.  Mr.  Justice  Field  contributes  a  dissenting  opinion,  but 
his  dissent  is  not  based  on  the  principle  of  ownership  by  the  State 
of  wild  animals.    See  also  Silz  v.  Hesterberg,  211  U.  S.31  (1908). 

As  this  affords  an  especially  instructive  illustration  of  the  ripen- 
ing of  property  out  of  mere  possesssion,  the  following  notes  are 
given,  although  the  treatment  is  more  detailed  than  in  general  is 
allowed  in  a  work  of  the  present  scope: 

"In  animals  domitce  naturce — tame  animals — a  man  may  have 
as  absolute  a  property  as  in  any  inanimate  things."  Cyclopcedia  of 
Law  and  Procedure  (Vol.  II,  p.  304),  citing  cases  2  Ind.  377;  100 
Mass.  136;  35  Vt.  247;  7  Coke,  18a;  2  Bl.  Comm.  390. 

In  the  same  work:  " Dogs  are  animals  domitoi  naturce  (37  Ala.  430; 
34  N.  H.  523;  20  N.  C.  146;  30  Tex.  App.  333:  accorci;  contra,  75  Me. 
562)  and  the  law,  both  in  England  and  the  United  States,  recognizes 
property  in  and  to  them  (citing  cases  from  twenty-one  states,  the 


PROPERTY  DEFINED  AND  DESCRIBED  111 

District  of  Columbia,  and  England — about  one  hundred  cases  in 
all).  Such  property  has  been  held,  however,  not  to  stand  on  the 
same  ground  as  property  in  other  animals,  but  is  said  to  be  base, 
inferior,  and  entitled  to  less  regard  and  protection  (citing  six  states, 
the  United  States,  and  England).  Accordingly  at  common  law  and 
in  some  states,  a  dog  has  been  held  or  said  not  to  be  the  subject  of 
larceny  (citing  about  a  dozen  jurisdictions),  not  to  be  'property' 
within  general  provisions  for  taxation  (citing  three  cases),  not  to  be 
inventoried  and  appraised  as  an  asset  of  a  decedent's  estate  (citing 
two  cases)  and  'case'  will  not  lie  for  its  intentional,  though  negli- 
gent destruction  (citing  four  cases)."    Op.  cit.,  p.  305. 

The  American  and  English  Encyclopcedia  (2d  ed.,  Vol.  II,  p.  347) 
says: 

"At  common  law,  there  could  be  no  larceny  of  a  dog."  (Citing 
nine  cases.)  .  .  . 

"In  many  jurisdictions  the  common  law  rule  has  been  changed 
by  statute,  either  by  specifically  enacting  that  the  felonious  taking 
of  a  dog  is  larceny  (citing  authority  10  Geo.  Ill,  c.  18)  or  upon 
the  ground  that  a  dog  is  a  domesticated  animal  (citing  authority), 
*  personal  property'  (citing  authority),  or  a  'thing  of  value'  (citing 
authority)  under  the  larceny  acts." 

The  Wisconsin  Statutes  of  1898  (Vol.  II,  p.  2686,  §  4415c)  make 
punishable  the  larceny  of  birds,  dogs,  electricity,  gas  and  water. 

American  Digest  (Vol.  12,  pp.  974-6)  says: 

"A  dog  is  the  subject  of  larceny,  being  comprehended  within 
the  term  'chattels,'  as  used  in  Code  1873,  §3907,  defining  such 
crime,  105  Iowa,  112." 

Under  3  Comp.  Laws,  §  11,553  under  phrase  "property  of  another, 
any  money,  goods  or  chattels,  etc.,"  a  dog  may  be  the  subject  of 
larceny.    133  Mich.  11. 

"A  dog  is  property  of  such  a  nature  as  to  be  capable  of  being  the 
subject  of  larceny."    1  N.  Y.  Cr.  R.  351. 

To  the  same  effect,  55  S.  C.  322,  a  dog  is  a  chattel  within  larceny 
act. 

^  P.  100.  The  following  communication  to  a  local  newspaper 
shows  popular  opposition  to  the  growth  of  the  idea  of  property 
in  fish  and  game. 

"It  is  refreshing  to  see  these  basic  American  principles  enunciated 
in  such  forceful  and  unmistakable  Anglo-Saxon.    There  is  no  room 


112    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

in  Wisconsin  for  the  game  preserves  of  a  Winans.  No  man  nor 
coterie  of  men  should  be  suffered  to  preempt  the  fowls  of  the  air 
nor  the  denizens  of  the  deep.  Every  citizen  of  our  country  has  a 
certain  inaUenable  right  to  fish  and  to  hunt,  imder  certain  well- 
defined  and  reasonable  restrictions  in  the  direction  of  the  general 
welfare  and  for  the  protection  of  game.  These  rights  are  as  funda- 
mental as  the  principles  laid  down  in  Magna  Charta.  Private 
fish  and  game  preserves  will  forever  be  unfashionable  in  the  United 
States.  Possibly  they  may  be  tolerated,  apparently  legalized. 
Perhaps  they  may  be  stocked,  protected,  and  replenished  at  the 
expense  of  the  commonwealth;  perhaps  not.  The  people  chafe  under 
any  tendency  towards  feudal  customs  of  this  sort.  A  frequent 
reading  of  such  Monroe  doctrine  as  this  fittingly  iterated  by  Judge 
Bundy  will  be  welcomed."     W.  W.  Warner,  Madison,  Wisconsin. 

8  P.  102.  For  criticism  of  the  term  "absolute"  in  this  connection, 
see  post,  p.  135  et  seqq. 

'  P.  102.  Kent,  Vol.  II,  p.  348, 14th  ed. 

"  P.  103.  The  following  cases  illustrate  the  principle  that  wild 
animals,  deer,  bees,  doves,  fish,  cats,  whales,  etc.,  are  not  subject 
to  ownership,  unless  dominion  over  them  has  been  secured,  and  that 
even  then  they  are  a  sort  of  "qualified  property  ".  Goff  v.  Kilts, 
15  Wend.  (N.  Y.)  550  (1836) ;  Pierson  v.  Post,  2  Am.  Dec.  264  (1805) ; 
Rexroth  v.  Coon,  15  R.  I.  35  (1885);  Commonwealth  v.  Chace,  9 
Pick.  (Mass.)  15  (1829) ;  Manning  v.  Mitcherson,  69  Ga.  447  (1882). 

That  the  ownership  in  wild  animals,  as  far  as  ownership  is  possi- 
ble, rests  in  the  State,  and  that  the  State  is  not  proprietor  but  rather 
trustee  holding  for  the  benefit  of  all  the  people,  is  illustrated  in 
the  following  cases:  Geer  v.  Connecticut,  161  U.  S.  519  (1896); 
State  V.  Rapp,  104  la.  305  (1898) ;  State  v.  Rodman,  58  Minn.  393 
(1894);  Ex  parte  Maier,  103  Cal.  476  (1894).  And  the  State  can 
make  them  subject  to  private  ownership  if  it  chooses;  this  can  be 
done,  e.  g.  with  oysters.  Proctor  v.  Wells,  103  Mass.  216  (1869); 
Martin  v.  Waddell,  16  Pet.  367  (1842) ;  McCready  v.  Virginia,  94 
U.  S.  391  (1876).  As  to  fish  see:  People  v.  Bridges,  142  111.  30 
(1892) ;  State  v.  Snowman,  94  Me.  99  (1900) ;  Dunham  v.  Lamphere, 
3  Gray  (Mass.),  268  (1855);  Lincoln  v.  Davis,  53  Mich.  375  (1884); 
People  V.  Doxtater,  75  Hun  (N.  Y.),  272  (1894). 

As  to  free  goods  in  court  decisions,  it  is  to  be  observed  that  light, 
air,  and  water  as  well  as  wild  animals,  are  usually  held  beyond 


PROPERTY  DEFINED  AND  DESCRIBED  113 

the  range  of  private  ownership.  But  they  can  be  reduced  to  owner- 
ship. "Water,  when  reduced  to  possession,  is  property,  and  it 
may  be  bought  and  sold,  and  have  a  market  value,  but  it  must 
be  in  actual  possession,  subject  to  control  and  management.  Run- 
ning water  in  natural  streams  is  not  property,  and  never  was."  Syra- 
cuse V.  Stacey,  169  N.  Y.  231  (1901).  So  of  mineral  oil;  it  is  not 
property  until  reduced  to  possession.  Dark  v.  Johnson,  55  Pa.  St. 
164  (1867). 

In  the  large  cities,  light  and  air  have  a  peculiar  value.  But 
American  courts  have  not  been  inclined  to  recognise  it.  In  London, 
skyscrapers  would  generally  be  an  impossibihty,  because  a  tenant 
may  acquire  an  easement  in  the  light  and  air,  and  when  an  adjoining 
tenant  or  owner  is  about  to  put  up  a  building  he  merely  hangs  out 
a  sign  "Ancient  Lights"  and  it  is  notice  to  the  person  building 
that  he  must  not  infringe  on  the  light  and  air  of  his  neighbour. 
Elevated  railways  have  been  held  by  American  courts  to  be  no 
invasion  of  the  right  to  light  and  air. 

"P.  103.  166  U.  S.  698  (1897). 

12  P.  105.  p.  13,  op.  ciL,  Bk.  II,  Chap.  1,  p.  2. 

"  P.  105.  "AUes,  was  jemandem  zugehort,  alle  seine  korperlichen 
u.  unkorperlichen  Sachen,  heissen  sein  Eigentum.  Als  ein  Recht 
betrachtet  ist  Eigentum  das  Befugnis,  mit  der  Substanz  u.  den 
Nutzungen  einer  Sache  nach  Willkiir  zu  schalten  u.  jeden  anderen 
davon  auszuschliessen."  Quoted  in  article  "Eigentum,"  in  Hand- 
worterbuch  der  Staatswissenschaften  (1892),  by  H.  von  Scheel. 

1^  P.  106.  p.  1. 

15  P.  106.  A  celebrated  Roman  Catholic  writer  says  that  "  Prop- 
erty is  the  physical  medium  of  communion  with  God  and  with  man." 
While  there  is  truth  in  this  it  is  poetic  rather  than  legal  or  economic. 
Dr.  Washington  Gladden  expresses  the  same  idea  in  his  Tools  and 
the  Man,  when  he  says  that  "Property  is  communion  with  God 
through  the  material  world." 

1*  P.  107.  The  reader  who  wishes  further  discussion  of  this  con- 
cept is  referred  to  the  excellent  treatment  of  property  by  Mr.  Justice 
Francis  J.  Swayze  in  a  recent  article  on  "  The  Judicial  Construction 
of  the  Fourteenth  Amendment."  The  elastic  nature  of  the  concept 
is  well  brought  out  by  a  comparative  study  of  judicial  decisions 
and  the  conclusion  reached  is  in  general  harmony  with  the  position 
taken  in  the  present  work,  namely:  "Upon  the  whole  the  decisions 


114    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

lean  in  favor  of  the  public,  and  towards  the  quaUfication  of  prop- 
erty rights."  At  the  same  time  it  is  noteworthy  that  Mr.  Justice 
Swayze  does  not  attempt  a  formal  definition  of  property  but  takes 
nearly  five  printed  pages  to  describe  the  concept.  See  Harvard  Law 
Review,  November,  1912,  pp.  13-18. 

"  P.  108.  Our  courts  have  necessarily  been  obliged  to  discuss 
the  idea  of  public  property  in  certain  cases.  As  the  State  extends 
its  functions,  the  question  of  the  difference  between  private  and 
public  property  becomes  increasingly  important  and  complex.  The 
question  has  come  before  the  courts  in  the  interpretation  of  tax 
laws.  States  usually  exempt  "pubhc  property  ",  or  pubUc  property 
used  for  pubUc  purposes,  from  taxation.  This  does  not  embrace 
private  property  used  for  pubUc  purpose,  but  from  which  a  private 
income  is  derived,  such  as  a  market  house  [State  v.  Cooley,  62  Minn. 
183  (1895)]  or  a  school  [Mundy  v.  Van  Hoose,  104  Ga.  292  (1898)] 
or  an  armoury  owned  by  private  parties  and  leased  to  the  State 
[Board  of  Trustees  v.  Atlanta,  113  Ga.  883  (1901)];  that  is,  it  seems 
to  be  a  question  of  ownership,  rather  than  a  question  of  use.  Public 
property  is  such  as  "is  not  used  for  purpose  of  private  or  corpor- 
ate profit  or  income"  [Mundy  v.  Van  Hoose,  104  Ga.  292  (1898)  at 
p.  300].  "That  private  property  is  used  exclusively  for  pubUc  pur- 
poses does  not  change  the  nature  of  the  property  or  the  title  thereto, 
so  as  to  convert  it  into  public  property"  [Trustees  v.  Atlanta,  113 
Ga.  883  (1901)  at  p.  886].  "Private  property  cannot  be  converted 
into  pubhc  property  by  the  simple  declaration  of  the  general  as- 
sembly" (ibid.). 

In  1864  the  Kentucky  Supreme  Court  decided  that  certain 
property  owned  by  municipahties,  i.  e.  public  property,  was  taxable 
under  a  statute  then  in  force  which  exempted  from  taxation  mu- 
nicipal property  "used  for  pubhc  purposes  of  local  government." 
The  court  said,  "Whatever  property,  such  as  court  house,  prison, 
and  the  like,  which  becomes  necessary  or  useful  to  the  administra- 
tion of  the  municipal  government,  and  is  devoted  to  that  use,  is 
exempt  from  state  taxation;  but  whatever  is  not  so  used,  but  is 
owned  and  used  by  Louisville  in  its  social  and  commercial  capacity, 
as  a  private  corporation,  and  for  its  own  profit,  such  as  vacant  lots, 
market  houses,  fire  engines,  and  the  like,  is  subject  to  taxation. 
If,  however,  as  just  indicated,  the  property  owned  by  the  city  as 
a  private  corporation  is  not  used  for  profit  to  the  city,  but  is  dedi- 


PROPERTY  DEFINED  AND  DESCRIBED  115 

cated  to  charity,  it  is  not  constructively  subject  to  taxation  under 
any  existing  law."  [City  of  Louisville  v.  Commonwealth,  1  Duval 
(Ky.),  1,295  (1814)  at  p.  298.]  This  unusual  decision  was  quite 
universally  criticised  (see  Dillon  on  Municipal  Corporations,  §  1397, 
note  2,  5th  ed.),  and  was  reversed  in  City  of  Owensboro  v.  Common- 
wealth, 105  Ky.  344  (1899),  in  which  case  the  court  decided  that  fire 
apparatus  and  public  parks  came  under  the  tax  exemption.  The 
words  of  the  court  are  interesting  from  a  sociological  point  of  view: 

"The  municipal  authorities  are  charged  with  the  duty  of  main- 
taining the  public  health,  and  in  the  judgment  of  scientific  men,  it 
is  essential  to  the  public  health  that  cities  have  and  maintain  parks 
where  the  people  can  breathe  wholesome  air.  People  of  this  en- 
lightened age  justify  the  levying  of  taxes  to  maintain  them.  They 
are  just  as  much  public  property  used  for  public  purposes  as  are 
streets  and  trees  planted  therein,  and  it  would  be  just  as  proper 
and  reasonable  to  tax  the  one  as  the  other.  The  public  have  access 
to  and  enjoy  both.  In  our  opinion,  the  public  park  is  public  prop- 
erty, used  for  public  purposes,  and  necessary  to  the  proper  govern- 
ment of  the  city." 

The  question  that  arises,  as  municipalities  and  States  assume 
ownership  of  public  utilities,  is  one  of  income,  of  use,  not  of  owner- 
ship. A  State  has  the  right  to  tax  its  own  property  if  it  wishes 
(see  Cooley  on  Taxation,  pp.  263  et  seq.,  3d  ed.).  And  a  State  has  a 
right  to  engage  in  any  activities  its  people  may  determine  upon. 
So  it  is  no  longer  merely  a  question  of  using  public  property  for 
governmental  purposes. 

See  Walden  v.  Town  of  Whigham,  120  Ga.  646  (1904).  In  this 
case  the  town  of  Whigham  opened  a  liquor  dispensary  and  sold 
liquor.  The  court  held  that  the  building  and  the  stock  of  liquors 
were  "public  property"  and  under  the  State  law  were  exempt  from 
taxation,  even  though  the  town  had  no  legal  authority  to  maintain 
such  a  dispensary.  An  earlier  decision  in  the  same  State  had  held 
that  "public  property  is  not  taxed  whether  income  be  derived  from 
it  or  not"  [Trustees  v.  Bohler,  80  Ga.  (1887)  159,  at  p.  163]. 

The  Delaware  courts  have  attempted  to  mark  a  duality  in  the 
nature  of  public  property:  "Although  the  property  held  for  the 
municipality  is  in  fact  public,  as  common  to  all  the  inhabitants 
of  a  city,  it  nevertheless  may  justly  be  said  to  be  private  property 
as  being  such  property  as  is  exempt  from  being  taken  or  appUed  to 


116    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

any  other  public  use  by  the  State,  or  by  authority  of  the  State,  with- 
out compensation  being  made"  [Coyle  v.  Gray,  30  At.  (1884)  728, 
at  p.  733].  This  distinction  may  be  justly  termed  airy  and  meta- 
physical and  leads  nowhere. 

There  is,  of  course,  no  mystical  distinction  between  private  and 
public  property.  It  depends  upon  the  state,  upon  sovereignty,  to 
declare  what  it  shall  assume,  as  public  functions,  and  to  acquire 
the  property  necessary  to  carry  out  these  functions.  The  distinc- 
tions between  the  property  owned  by  the  State  and  by  private  in- 
dividuals are  such  distinctions  as  are  inherent  in  the  case,  e.  g.  a 
city's  property  would  not  be  subject  to  a  mechanic's  hen,  or  such 
distinctions  as  the  State  may,  of  its  own  volition,  impose  upon  its 
property,  e.  g.  exempting  it  from  taxation. 

1*  P.  108.  Macleod  is  emphatic  in  his  statement  that  "property 
in  its  true  and  original  sense  means  solely  a  right,  title,  interest,  or 
ownership;  and  consequently,  to  call  material  things  Uke  land, 
houses,  money,  cattle,  etc.,  property  is  as  great  an  absurdity  as  to 
call  them  right,  title,  interest  or  ownership.  Neither  Bacon,  nor, 
so  far  as  we  are  aware,  any  writer  of  his  period  calls  material  goods 
property;  such  a  use  of  the  word  is  quite  a  modern  corruption,  and 
we  cannot  say  when  it  began."  "  Landed  property,  funded  property, 
house  property,  real  property,  personal  property,  hterary  property, 
mean  rights  to  land,  rights  to  houses,  rights  to  realty,  rights  to 
personalty,  rights  to  payments  from  the  nation,  rights  to  the  profits 
from  literature  and  art,  and  so  on."  Nevertheless,  although  he 
protests  against  the  usage,  he  himself  employs  the  term  property 
in  the  large  sense.  He  says,  for  instance,  that  there  are  three 
distinct  orders  of  "economic  or  exchangeable  quantities,"  viz., 
"I.  Material  things;  II.  Labour  or  Services;  III.  Rights:  typified  by 
the  terms  money,  labour  and  credit."  Now  he  says  that  property 
is  the  general  term  covering  them  all,  although  he  said  before  that  it 
only  referred  to  rights.  It  is  difficult  to  see  how  anyone  can  avoid 
using  the  term  property  in  the  large  sense.  We  would  have  to  em- 
ploy a  very  awkward  circumlocution  to  avoid  its  usage.  Only  we 
must  remember  that  in  the  narrow  sense  property  is  a  right. 

Macleod,  however,  shows  that  he  appreciates  the  importance 
of  property  when  he  says  that  it  "  is  the  key  to  all  economics." 

Henry  Dunning  Macleod,  Elements  of  Economics,  1,  pp.  141,  143, 
144. 


PROPERTY  DEFINED  AND  DESCRIBED  117 

"  P.  108.  The  distinction  between  property  as  rights,  and  the 
object  over  which  the  rights  are  extended  is  clearly  brought  out  in 
Eaton  V.  The  Boston,  Concord  and  Montreal  Railroad,  51  N.  H. 
504,  pp.  511-2  (1872). 


CHAPTER  IV 

PROPERTY.    POSSESSION.   ESTATE.   RESOURCES 

It  is  well  at  this  point  to  distinguish  between  prop- 
erty and  three  allied  concepts,  namely,  possession,  estate, 
and  resources. 

Possession,  as  defined  in  Bouvier's  Law  Dictionary, 
is  ''the  detention  and  occupation  of  things;  having  things 
in  keeping^'  This  definition,  not  an  entirely  satis- 
factory one  perhaps,  will,  however,  do  for  present 
purposes.  Possession  as  thus  defined  is  something  dif- 
ferent from  the  concept  property.  Raleigh  in  his  def- 
inition of  possession  as  given  in  his  work  on  the  Law  of 
Property  says  that  to  assert  that  a  person  is  in  posses- 
sion of  a  thing  means,  ''first,  that  he  has  the  custody 
of  a  thing  or  control  over  it."  Add  to  this  Raleigh's 
words:  "Or,  at  least,  that  he  stand  in  such  relation  to 
it  as  will  enable  him  to  use  it  or  receive  income  derived 
from  it  during  the  time  possession  lasts."  It  means, 
says  Raleigh,  ''Second,  that  he  manifests  the  will  to 
maintain  his  relation  to  the  thing,  and  to  exclude  other 
persons  from  acquiring  control  over  it.  Possession  may 
be  called  the  outward  form  of  ownership,  but  the  form 
may  be  present  without  the  reality."  While  this  is 
likewise  not  altogether  satisfactory,  it  is  nevertheless 
helpful  in  leading  us  to  a  distinction  between  possession 
and  property.^    It  shows  several  things.     First,  that 

118 


PROPERTY,  POSSESSION,  ESTATE,  RESOURCES      119 

the  use  of  the  word  is  not  a  clear  and  simple  one,  but 
rather  confused  and  complex;  and,  second,  it  shows 
that  there  is  a  close  connection  between  property  and 
possession.  Raleigh  wants  to  make  a  distinction,  and 
yet  he  finds  difficulty  in  so  describing  possession  that 
it  will  not  amount  to  the  same  thing  as  property.  He 
says  that  possession  is  the  outward  form  of  property, 
and  yet  the  two  are  not  identical.  Now  it  is  very  true 
that  possession  tends  to  become  property.  We  have 
a  legal  phrase,  ''Possession  is  nine  points  of  the  law," 
as  if  the  two  went  naturally  together;  yet  implying  that 
possession  is  not  property.-  What  we  in  our  law  term 
a  bailment,  as  a  hired  horse,  gives  an  instance  of  pos- 
session without  property.  We  may  employ  the  ex- 
pression mere  possession  technically  to  indicate  pos- 
session without  property. 

We  may  make  the  distinction  between  property  and 
possession,  that  property  carries  with  it,  usually  at 
least,  the  right  to  sell  a  possession,  while  mere  posses- 
sion does  not  amount  to  property  and  does  not  carry 
with  it  the  right  to  sell.  But  this  is  hardly  sufficient  for 
our  purposes;  and  it  is  doubtless  quite  insufficient  even 
for  legal  purposes.  Macleod  following  the  Roman  law 
makes  much  depend  on  the  distinction  between  pos- 
session and  property.  He  says  that  there  is  an  essential 
distinction  between  the  right  of  possession  and  the  right 
of  property  and  speaks  of  the  "mere  right  of  possession". 
This  distinction  between  the  two  he  brings  out  in  the 
treatment  of  loans,  of  which  there  are  two  kinds,  one 
kind  conveying  the  right  of  possession  only  for  a  limited 
tune,  and  another  kind  which  transfers  the  right  of  prop- 


120    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

erty.  In  one  kind,  the  right  of  property  passes  with 
the  loan,  while  in  the  other  kind  only  the  right  of  pos- 
session passes.  In  loans  of  the  first  kind  the  identical 
thing  is  returned,  and  only  the  right  of  possession  passes. 
In  loans  of  the  second  kind  only  an  equivalent  amount 
or  equal  value  is  returned.  The  distinction  is  based 
upon  the  nature  of  the  things  which  are  the  subject 
of  the  loan.  Things  in  which  the  right  of  property 
passes  with  the  loan  are  called  fungibles;  or  to  employ 
the  Latin  term  res  fungibiles.  And  those  in  which  the 
right  of  property  does  not  pass  are  non-fungibles, — res 
non  fungibiles.  Now  a  loan  in  which  the  right  of  posses- 
sion only  is  conveyed  is  called  commodatum,  as,  for  in- 
stance, a  book  or  a  horse ;  and  the  other  kind  is  called  mu- 
tuum,  loans  in  which  the  right  of  property  is  transferred. 
In  the  case  of  a  commodatum  the  identical  horse  or  book 
must  be  returned,  but  the  mutuum  is  a  loan  in  which  the 
right  of  property  is  transferred.  ''There  is,"  says  Mac- 
leod,  ''another  kind  of  loan,  in  which  the  things  lent  can- 
not be  used  or  enjoyed  without  their  destruction,  con- 
sumption or  alienation.  Thus,  if  a  person  borrows  bread 
or  oil  or  wine  or  coals,  etc.,  he  cannot  use  them  without 
consmning  or  destroying  them,  and  they  are  borrowed 
for  the  very  purpose  of  being  destroyed. 

"Hence,  from  the  very  necessity  of  the  case  the  prop- 
erty in  such  things  must  be  transferred  to  the  borrower; 
and  he  undertakes  to  return  to  the  lender  an  equal 
amount  of  the  thing  lent  in  quantity  and  quality." 
Thus  when  a  loan  is  made  in  money,  the  right  of  prop- 
erty in  the  money  passes.  "So  a  person  who  borrows 
money  cannot  use  it  imless  he  exchanges  it  away  for 


PROPERTY    POSSESSION,  ESTATE,  RESOURCES      121 

something  else:  consequently,  the  person  who  borrows 
money  must  acquire  the  absolute  property  in  it. 

''So  if  a  person  borrows  a  postage  stamp,  the  only 
way  a  stamp  can  be  used  is  to  affix  it  to  a  letter,  by 
which  it  is  destroyed;  hence  the  borrower  must  acquire 
the  property  in  it." 

Those  things  only  are  the  subject  of  mutuum  which 
consist  in  pondere,  numero,  et  mensura,  that  is,  which 
are  estimated  generically  in  weight,  number  and  measure. 
These  things  are  in  the  Roman  law  called  quantitates  fun- 
gihiles.  But  the  commodatum  consists  of  things  which 
are  returnable  in  specie;  that  is,  the  identical  thing  is 
returned.  In  the  mutuum  things  are  returnable  in 
genere;  that  is,  of  the  same  kind  and  quantity,  but  not 
the  identical  thing.  In  the  one  case,  the  particular 
horse  or  book  which  was  borrowed  is  returned;  but  on 
the  other  hand,  if  a  bushel  of  grain  is  borrowed  the 
thing  is  returned  in  the  same  quantity  and  of  the  same 
general  quality.^ 

Blackstone  had  in  mind  the  distinction  between  pos- 
session and  property  when  he  wrote  the  following: 
"Not  that  this  conmiunion  of  goods  seems  ever  to  have 
been  applicable,  even  in  the  earlier  stages,  to  aught  but 
the  substance  of  the  thing,  nor  could  it  be  extended  to 
the  use  of  it.  For,  by  the  law  of  nature  and  reason,  he, 
who  first  began  to  use  it,  acquired  therein  a  kind  of 
transient  property,  that  lasted  so  long  as  he  was  using 
it,  and  no  longer:  or  to  speak  with  greater  precision, 
the  right  of  possession  continued  for  the  same  time  only 
that  the  act  of  possession  lasted."^  He  uses  the  ex- 
pression "a  kind  of  transient  property",  meaning  by 


122    PROPERTY  AND  THE  DISTRIBUTION!  OF  WEALTH 

transient  property  what  we  mean  by  possession  as  dis- 
tinguished from  property;  for  when  in  economics  we 
discuss  possession  as  distinguished  from  property,  we 
mean  as  a  rule  that  right  of  possession  which  continues 
for  the  same  time  that  the  act  of  possession  lasts. 

The  great  English  jurist  and  philosopher,  Jeremy 
Bentham,  brings  out  admirably  the  distinction  be- 
tween property  and  possession  in  the  following  quo- 
tations : 

''The  better  to  understand  the  advantages  of  law,  let  us 
endeavour  to  form  a  clear  idea  of  'property.  We  shall  see  that 
there  is  no  such  thing  as  natural  property,  and  that  it  is 
entirely  the  work  of  law.^ 

"The  idea  of  property  consists  in  an  established  expecta- 
tion; in  the  persuasion  of  being  able  to  draw  such  or  such  an 
advantage  from  the  thing  possessed,  according  to  the  nature 
of  the  case.  Now,  this  expectation,  this  persuasion,  can  only 
be  the  work  of  law.  I  cannot  count  upon  the  enjoyment 
of  that  which  I  regard  as  mine,  except  through  the  promise 
of  the  law  which  guarantees  it  to  me.  It  is  law  alone  which 
permits  me  to  forget  my  natural  weakness.  It  is  only  through 
the  protection  of  law  that  I  am  able  to  inclose  a  field,  and 
to  give  myself  up  to  its  cultivation  with  the  sure  though 
distant  hope  of  harvest.  .  .  . 

"There  have  been  from  the  beginning,  and  there  always 
will  be,  circumstances  in  which  a  man  may  secure  himself, 
by  his  own  means,  in  the  enjoyment  of  certain  things.  But 
the  catalogue  of  these  cases  is  very  limited.  The  savage 
who  has  killed  a  deer  may  hope  to  keep  it  for  himself,  so 
long  as  his  cave  is  undiscovered;  so  long  as  he  watches  to 
defend  it,  and  is  stronger  than  his  rivals;  but  that  is  all. 
How  miserable  and  precarious  is  such  a  possession!  If  we 
suppose  the  least  agreement  among  savages  to  respect  the 
acquisitions  of  each  other,  we  see  the  introduction  of  a  prin- 


PROPERTY,  POSSESSION,  ESTATE,  RESOURCES      123 

ciple  to  which  no  name  can  be  given  but  that  of  law.  A 
feeble  and  momentary  expectation  may  result  from  time 
to  time  from  circumstances  purely  physical;  but  a  strong 
and  permanent  expectation  can  result  only  from  law.  That 
which,  in  the  natural  state,  was  an  almost  invisible  thread, 
in  the  social  state  becomes  a  cable.  "^ 

This  distinction  between  property  and  possession  lies 
at  the  bottom  of  the  anarchist  movement.^  The  anar- 
chists propose  to  substitute  possession  for  property, 
and  they  claim  that  if  possession  is  substituted  for  prop- 
erty, then  rent  and  other  special  privileges  will  be  abol- 
ished. According  to  this,  if  you  see  a  vacant  piece  of 
land,  you  take  possession  of  it  and  use  it,  and  hold  it 
so  long  as  you  use  it  and  no  longer;  for  when  you  cease 
using  it,  you  have  no  right,  that  is,  no  real,  ethical  right 
to  hold  it.  The  anarchists  claim  that  when  possession 
is  substituted  for  property,  rent  will  be  abolished. 
WTiile  we  cannot  stop  now  and  here  to  examine  into  the 
theory  at  length,  it  takes  no  profound  critical  analysis 
to  show  that  inequalities  would  not  thereby  be  abol- 
ished nor  economic  unearned  increment.  If  each  per- 
son should  take  in  this  way  whatever  property  he 
found  vacant  and  enjoy  the  right  of  possession,  there 
would  still  be  inequalities  in  the  land  and  opportunities 
enjoyed  by  various  individuals.  Suppose  you  go  into 
the  heart  of  a  great  city  where  this  anarchist  regime  is 
being  introduced ;  you  find  a  choice  vacant  lot  and  take 
possession  of  it;  others  do  the  same;  the  best  land 
with  choicest  opportunities  will  be  first  seized,  and  the 
later  comers  will  have  to  take  the  least  choice  sites  and 
the  least  desirable  of  natural  opportunities.    Even  if  the 


124    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

right  of  possession  is  enjoyed  only  so  long  as  the  act  of 
use  lasts,  you  will  still  have  an  mmense  advantage 
over  the  others  in  the  possession  of  superior  natural 
opportunities.  Property  means  protection  of  one's 
right  of  enjoyment  through  the  state,  that  is,  through 
third  parties,  and  to  that  the  anarchists  object.  They 
say  that  the  right  of  possession  should  last  during  use 
and  then  cease;  then  one's  own  physical  powers  backed 
up  by  public  opinion  would  enable  one  to  maintain 
possession  and  keep  the  desirable  thing  for  one's  own 
use.  Thus  the  discussions  of  the  so-called  scientific 
anarchists  turn  upon  this  distinction  between  posses- 
sion and  property,  and  this  among  other  things  makes 
this  distinction  significant.^ 

It  may  be  suggested  at  this  point  that  it  is  impossible 
so  to  develop  the  concept  possession  in  its  economic 
and  social  aspects  that  it  will  conform  to  the  ideas  of  the 
anarchists.  Shall  we  allow  possession  to  be  held  by 
agents?  If  not,  a  mere  temporary  absence  (for  example, 
to  sell  the  products  of  one's  land)  would  work  forfeiture 
of  possession.  But  if  one  can  hold  possession  by  agents, 
for  how  long?  If  for  a  series  of  years,  the  possibilities 
of  unearned  income  at  once  appear.  Where  are  we  to 
draw  the  line?  It  is  impossible.  This  is  a  mere  sug- 
gestion. If  the  reader  examines  any  legal  treatment 
of  possession  and  property  (for  example,  that  found  in 
Holmes's  Common  Law)  and  attempts  to  separate  the 
two  in  such  a  way  as  to  carry  out  the  anarchist  pro- 
gramme, he  will  soon  discover  that  he  has  attacked  a 
problem  bristling  with  insuperable  difficulties. 

We  now  take  up  estate  as  distinguished  from  full 


PROPERTY,  POSSESSION,  ESTATE,  RESOURCES      125 

property.  An  estate  is  a  right  in  land  that  is  less  than 
full  property,  but  a  great  deal  more  than  possession  in 
the  sense  in  which  we  have  used  the  word.  In  reality, 
an  estate  is  a  lease,  but  it  is  different  in  several  respects 
from  an  ordinary  lease.  Estate  is  the  term  of  feudal 
law  which  indicates  that  there  is  a  right  in  the  land  su- 
perior to  that  of  the  one  who  has  the  estate  in  the  land ; 
or  in  other  words,  that  the  one  who  owns  the  estate  has 
above  him  a  superior  owner.  This  applies  especially 
to  England  and  it  was  the  rule  at  one  time  in  many  of 
the  separate  commonwealths  in  the  United  States.  Ac- 
cording to  the  coDomon  law  of  England  full  property  in 
the  land  does  not  exist  except  in  the  Crown.  The  main 
proprietor,  or  superior  proprietor  is  the  Crown,  and 
those  holding  under  the  Crown  have  an  estate.  The 
proprietor  after  the  conquest  was  William  the  Con- 
queror, who  granted  estates;  and  in  England  it  is  for  an 
individual  still  possible  only  to  have  an  estate  in  land 
and  not  to  have  full  property.  Bacon  says,  "Property 
of  lands  by  conveyance  is  first  distributed  into  estates 
for  years,  for  life,  in  tail  and  fee  simple."  It  is  a  per- 
petual right,  subject  only  to  that  superior  right  of  the 
Crown  or  sovereignty.  ''An  estate  therefore,"  says 
Macleod,  "is  always  a  right  of  an  inferior  order  to  prop- 
erty; it  in  reality  means  a  lease.  As  Bacon  says:  'For 
estates  for  years  which  are  commonly  called  leases  for 
years.  Such  interests  or  estates  in  land  were  always 
given  as  the  fee  or  reward  for  service  rendered  to  the 
Crown.  The  last  and  greatest  estate  of  lands  is  fee  sim- 
ple. ...  It  is  the  greatest,  last  and  uttermost  degree 
of  estates  in  land.'"^    And  yet  even  an  estate  in  fee 


126    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

simple  is  therefore  something  less  than  full  property  in 
land  which  is  called  "allodial". 

For  practical  purposes  the  distinction  is  not  of  great 
importance.  Under  certain  conceivable  circumstances 
it  could  become  important.  Because  if  there  is  a  supe- 
rior proprietor,  in  whom  a  higher  title  is  vested,  then  this 
superior,  or  proprietor  has  theoretically  rights  which  he 
would  not  enjoy  under  full  property.  It  has  been  held 
on  that  account  that  the  Crown  has  special  rights  in 
England. 

Estates  are  of  various  kinds,  and,  as  Bacon  says, 
''the  last  and  greatest  estate  of  lands  is  fee  simple"; 
and  that  is  something  less  than  full  property.  Still,  if 
the  state,  commonwealth,  or  sovereignty  parts  with 
this  superior  right,  there  remains  eminent  domain;  and 
this  really  comes  from  the  right  of  the  sovereign  supe- 
rior to  that  of  the  individual.  So  that  under  allodial 
property  in  land,^*^  as  in  the  American  commonwealths, 
there  still  remains  eminent  domain,  and  for  practical 
purposes  full  or  allodial  property  in  the  United  States 
means  no  more  than  the  right  which  the  Englishman 
has  in  his  land,  although  the  latter  has  only  an  estate. 
For  an  Englishman  may  not  be  deprived  of  his  estate 
without  compensation,  nor  can  the  one  who  has  full 
property. 

We  must  now  give  our  attention  to  still  another  con- 
cept,— namely,  resources.  We  employ  this  term  in 
the  technical  sense,  corresponding  to  the  German  word 
Vermogen,  as  unfortunately  we  have  no  English  word 
so  definite  and  concise  as  this,  but  the  accounting 
phrase  net  assets  comes  to  about  the  same  thing,  re- 


PROPERTY,  POSSESSION,  ESTATE,  RESOURCES      127 

garded  from  a  different  point  of  view.^^  It  is  defined 
thus,  ''Resources,  the  aggregate  of  economic  goods 
owned  by  a  physical  or  legal  person,  after  deduction  is 
made  of  the  person's  debts  and  all  valuable  and  rightful 
claims  have  been  added."  This  concept  is  based,  in 
part  at  least,  upon  the  distinction  between  possession 
and  property.  You  may  have  full  right  of  property  in 
things  which  do  not  belong  to  your  resources.  Bearing  in 
mind  the  distinction  between  mutuum  and  commodatum, 
you  may  have  the  right  of  property,  say,  in  grain;  that 
is,  you  have  those  rights  which  go  with  the  right  of  prop- 
erty, namely,  an  exclusive  right  of  control.  But  there 
is  claim  against  you,  and  you  cannot  say  that  all  that 
grain  belongs  to  your  resources,  because  there  is  an 
offset,  perhaps  a  chattel  mortgage  that  must  be  sub- 
tracted. On  the  other  hand,  there  are  things  which  are 
comprised  in  the  property  of  others  against  which  you 
have  claims.  These  claims  must  be  added  to  the  re- 
sources, the  Vermogen. 

Marshall  uses  the  term  ''true  net  wealth"  in  a  some- 
what similar  manner  in  his  Economics  of  Industry.  Mar- 
shall says  when  he  speaks  simply  of  a  man's  wealth  that 
it  includes  first  the  material  goods  in  which  he  has  the 
right  of  property,  and  in  his  definition  he  includes  a 
definition  of  "true  net  wealth": 

"These  include  not  only  lands,  houses,  furniture,  machin- 
ery and  other  material  goods  which  may  be  in  his  single  pri- 
vate ownership,  but  also  shares  in  public  companies,  deben- 
ture bonds,  mortgages  and  other  obligations,  which  he  may 
hold  from  others,  to  pay  goods  to  him.  On  the  other  hand 
the  debts  which  he  owes  to  others  may  be  regarded  as  nega- 


128    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

tive  wealth  and  must  be  subtracted  from  his  gross  possessions 
before  his  true  net  wealth  can  be  found." 

And  his  wealth  also  includes,  says  Marshall,  ''im- 
material goods,  which  are  external  to  him,  and  serve 
directly  as  the  means  of  enabling  him  to  acquire  ma- 
terial goods;  such  for  instance  as  the  good  will  of  his 
business  or  his  professional  practice. "^^ 

Marshall  says  that  wealth  does  not  include  those 
things,  ''services  and  other  goods",  which  pass  out  of 
existence  in  the  instant  that  they  come  into  it;  ''they 
do  not  contribute  to  the  stock  of  wealth  and  may  there- 
fore be  left  out  of  account."  They  are  useful  things,  of 
course,  but  they  perish  as  they  come  into  existence,  and 
therefore  he  excludes  them  from  the  stock  of  wealth. 
Those  immaterial  things  which  enable  men  to  acquire 
material  goods  are  included,  but  personal  qualities  and 
faculties  are  excluded  because  they  are  not  considered 
as  economic  goods,  economic  goods  being  a  means  to  an 
end  and  for  the  satisfaction  of  human  wants;  but  when 
we  reach  man's  personal  qualities  we  reach  that  for 
which  economic  goods  exist.  Sometimes  these  personal 
qualities  and  faculties  are  called  personal  wealth,  by  a 
figurative  expression;  but  we  distinguish  between  per- 
sonal wealth  and  external  material  goods  or  those  im- 
material goods  which  enable  one  to  acquire  external  ma- 
terial goods.  ^^  All  of  these  we  place  in  resources.  We 
have  then  the  four  concepts:  property,  possessions, 
estate,  and  resources.  These  ideas  must  be  held  clearly 
in  our  minds  in  order  to  understand  subsequent  dis- 
cussions. 


Notes  and  References  to  Chapter  IV 

'  P.  118.  Geldart,  Elements  of  English  Law  (in  "Home  Univer- 
sity" Series),  p.  116,  says:  "The  essence  of  ownership  is  that  it  is  a 
right  or  an  aggregate  of  rights.  Possession,  on  the  other  hand,  is 
primarily  a  matter  of  fact."  But  (p.  118)  "possession  is  a  fact 
to  which  legal  rights  are  attached." 

2 P.  119.  "The  ambiguous  character  of  the  term  'Possession' 
is  well  known,  and  has  been  recognized  by  high  authority.  It  has 
several  meanings,  and  it  may  well  have  several  different  meanings 
in  the  same  instrument."  (LesUe  v.  Rothers,  2  Chap.  499,  1894). 
S.  P.  0. 

3  P.  121.  Macleod,  Elements  of  Economics,  Vol.  I,  Bk.  II, 
Chap.  I,  pp.  141-5,  298-302.  Also,  Macleod,  Theory  and  Practice 
of  Banking,  Vol.  I,  pp.  90-95. 

In  Black's  Law  Dictionary/  under  loan,  commodatum  is  called  loan 
for  use  and  is  distinguished  from  mutuum,  loan  for  consumption : 

"A  loan  for  use  is  the  gratuitous  grant  of  an  article  to  another 
for  use,  to  be  returned  in  specie,  and  may  be  either  for  a  certain 
time  or  indefinitely,  and  at  the  will  of  the  grantor.  Code  Ga., 
1882,  sec.  2126. 

"Loan  for  use  (called  'commodatum'  in  the  Civil  Law)  differs  from 
a  loan  for  consumption  (called  'mutuum'  in  the  Civil  Law),  in  this: 
that  the  commodatum  must  be  specifically  returned;  the  mutuum 
is  to  be  returned  in  kind.  In  the  case  of  a  commodatum  the  property 
in  the  thing  remains  in  the  lender;  in  a  mutuum  the  property  passes 
to  the  borrower." 

But  the  writer  does  not  understand  that  the  commodatum  need  be 
gratuitous;  English  law  generally  employs  the  term  bailment  for  a 
loan  which  must  be  returned  in  specie,  that  is,  a  book,  a  horse;  but 
a  bailment  may  well  be  for  hire. 

For  a  further  and  scholarly  treatment  of  the  subject  see  Sohm's 
Institutes  of  Roman  Law  (translated  by  Ledlie),  §  59,  The  Law 
of  Things,  §  79,  The  Law  of  Obligations,  especially  pp.  305,  375, 
376. 

*  P.  121.  Applied  by  Blackstone  to  the  ground,  to  a  tree,  by  a 

129 


130    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

law  of  nature.  Blackstone,  op.  cit.,  Bk.  II,  Chap.  I,  pp.  3-4 
(Cooley'sed.). 

^  P.  122.  Jeremy  Bentham,  Theory  of  Legislation  (London,  1876), 
p.  111. 

s  P.  123.  Bentham,  op.  ciL,  pp.  112-3. 

^  P,  123.  No  reference  is  made  here  to  the  anarchist  agitation, 
the  use  of  violence,  etc.  The  purpose  is  simply  to  discover  underly- 
ing economic  concepts. 

8  P.  124.  It  is  interesting  to  notice  that  the  American  Federation 
of  Labor  once  adopted  a  resolution  in  favour  of  possession  of  land 
instead  of  ownership.  This  resolution,  known  as  Plank  No.  10 
in  a  proposed  platform,  reads  as  follows:  "The  abolition  of  the 
monopoly  system,  and  substitution  therefor  of  a  title  of  occupancy 
and  use  only."  It  appears  that,  while  these  planks  were  adopted 
one  by  one  at  Denver,  Colorado,  in  1894,  the  platform  as  a  whole 
was  never  adopted  and  seems  to  have  no  special  significance;  it  can- 
not be  taken  to  indicate  that  on  the  part  of  the  American  Federation 
of  Labor  it  was  ever  intended  to  adopt  this  feature  of  anarchism. 

3  P.  125.  Macleod,  Elements  of  Economics,  Vol.  I,  pp.  147-8. 

Geldart,  Elements  of  English  Law,  p.  125,  says:  "We  may  think  of 
an  estate  as  a  portion  of  ownership  more  or  less  limited  in  time." 
In  fee  simple  accordingly  the  limit  in  time  is  practically  non-existent, 
as  escheat  will  only  come  when  the  tenant  dies  intestate  or  without 
heirs.  Reversions  and  remainders  may  be  mentioned  as  future  es- 
tates in  lands. 

1"  P.  126.  Andrews  in  his  American  Law  (Chap,  on  Real  Estate), 
maintains  that  there  is  no  such  thing  as  tenure  in  America,  that  is, 
that  the  old  feudal  distinctions  between  estates  in  fee  simple  and 
ownership  have  vanished.  For  example,  the  New  York  Constitu- 
tion of  1894,  Art.  1,  sec.  11,  states:  "All  feudal  tenures  of  every 
description,  with  all  their  incidents,  are  declared  to  be  abolished." 
Thorpe,  Constitutions,  p.  2695,  Art.  1,  sec.  11. 

11  P.  127.  We  have  in  law  the  distinction  between  current  assets 
and  total  assets  on  the  one  hand,  and  current  liabilities  and  total 
liabilities  on  the  other.  If  current  assets  are  less  than  current  lia- 
bilities, it  means  legal  insolvency,  while  if  total  assets  are  less  than 
total  habilities,  real  insolvency  exists. 

12  P.  128.  Marshall,  Economics  of  Industry,  Note  III,  pp.  52-3. 

"  P.  128.  The  distinction  between  personal  qualities  and  wealth 


PROPERTY,  POSSESSION,  ESTATE,  RESOURCES      131 

is  a  somewhat  artificial  one.  Man  is  the  end,  but  personal  qualities' 
trained,  are  sometimes  trained  not  as  an  end  but  as  a  means,  just 
as  land  is  improved  in  order  to  secure  greater  yields.  So  we  some- 
times must  use  circumlocution  or  adjectives,  as  personal  wealth. 
Nevertheless  the  distinction  between  means  and  ends  is  of  too  great 
importance  to  be  overlooked,  and  it  is  worth  while  to  use  circum- 
locution to  avoid  confusion. 

Attention  is  called  to  Professor  Irving  Fisher's  inclusion  of  human 
beings  in  wealth,  in  his  Capital  and  Income  and  also  in  his  Elemen- 
tary Principles  of  Economics,  Chapter  I,  where  he  distinguishes  be- 
tween wealth  in  this  "broader  sense",  and  wealth  "in  the  ordinary 
meaning"  from  which  human  beings  are  excluded. 


CHAPTER  V 

THE  ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY 

We  now  pass  on  to  the  attributes  and  characteristics 
of  property,  and  we  direct  our  attention  in  this  chapter, 
more  particularly,  although  not  exclusively,  to  private 
property.  We  mention  first  as  an  attribute  of  property 
value.  In  property  we  have  to  do  with  economic  goods, 
and  economic  goods  are  goods  which  have  value,  and 
value  implies  two  things, — utility  and  scarcity.  In  law 
contracts  read  ''for  value  received."  If  there  were  no 
value  in  a  thing  there  would  be  no  inducement  to  appro- 
priate it.  And  thus  regularly  and  normally  one  of  the 
attributes  of  property  is  value.  Property  exists  in  things 
which  men  desire  and  which  are  so  scarce  that  they  are 
incapable  of  satisfying  fully  human  wants,  and  people 
are  willing  to  give  laborious  exertion  in  return  for  them. 

We  mention  as  a  second  quality  of  property  appro- 
priabiUty.  The  objects  of  property  must  be  capable 
of  appropriation.  If  the  air  were  capable  of  an  appro- 
priation exclusive  in  its  nature  it  might  cease  to  be  a 
free  good,  and  become  property.  But  the  air  is  not  ca- 
pable of  such  appropriation.  The  appropriation  found 
in  property  is  exclusive  in  its  nature,  and  carries  with 
it  as  an  attribute  the  right  of  the  proprietor  to  con- 
trol the  action  of  others  in  respect  to  the  objects  of  property. 
This  is  shown  by  Holland  in  his  Jurisprudence  in  the 

132 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    133 

statement  that  ''private rights  of  property"  signify  ''the 
capacity  residing  in  one  man  of  controlling  with  the 
assent  and  assistance  of  the  state  the  actions  of  others."^ 

Property  implies  the  assent  of  the  state,  and  in  this 
we  recur  to  the  distinction  between  property  and  mere 
possession.  If  you  have  possession  only,  you  leave  the 
field  and  another  comes  in  and  takes  possession.  If  you 
have  property,  then  the  third  person,  the  state,  keeps 
out  others  although  you  be  absent  yourself. 

This  brings  before  us  a  principle  of  the  most  far- 
reaching  importance.  Where  does  social  authority 
find  its  seat?  Does  it  find  its  seat  chiefly,  directly,  or 
immediately  in  government?  We  find  some  men  obey- 
ing other  men.  We  have  only  to  go  into  the  street,  or 
to  enter  a  factory,  and  we  find  one  man  commanding 
other  men.  We  go  into  a  shop,  and  we  find  one  saying 
to  others,  'go,'  and  they  go;  'come,'  and  they  come. 
Everywhere  we  see  some  commanding  and  others  obey- 
ing. Why  is  this?  Is  there  any  law  compelling  them 
to  do  this?  Ordinarily  not.  The  seat  of  authority  is 
private  property.  We  may  say  that  authority  is  eco- 
nomic, inasmuch  as  authority  finds  its  seat  chiefly  in 
property.  But  it  is  in  property  that  restrictions  upon 
freedom  of  movement  are  for  the  most  part  found. 
They  exist  chiefly  outside  of  government.  Authority, 
in  other  words,  is  chiefly  economic  and  not  political 
and  public.  This  is  something  which  is  being  contin- 
ually overlooked  in  theoretical  and  practical  discussions. 
But,  on  the  other  hand,  property,  as  a  fully  developed 
institution,  has  its  foundation  in  government;  and  by 
a  round-about  and  indirect  way  we  come  back  to  the 


134    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

state,  but  the  theoretical  and  practical  differences  are 
vast. 

So  we  can  conceive  this  condition  of  things.  We 
might  have  a  political  restriction  of  liberty  or  freedom 
of  movement  which  would  amount  to,  say,  3,  and  fas- 
tening our  attention  simply  upon  this  political  act  we 
say  that  liberty  is  diminished  to  the  amount  of  3,  what- 
ever 3  may  be.  But  it  may  be  that  this  political  re- 
striction has  increased  economic  freedom  to  the  extent 
of  6.  Then  we  have  a  net  gain  of  3.  This  is  merely  a 
fanciful  case,  but  the  thing  itself  happens  frequently. 
All  wise  protective  labour  legislation  illustrates  this 
principle.  Employers  may  in  some  instances  be  re- 
stricted, as,  for  example,  when  they  are  not  permitted  to 
employ  in  factories  children  under  ten  years  of  age,  but 
if  the  children  in  consequence  are  educated  and  brought 
up  in  habits  of  diligence  and  reasonable  industry,  the 
total  gain  in  liberty  greatly  exceeds  the  loss.  Well- 
meaning  employees  will  themselves  feel  that  they  enjoy 
greater  liberty.  But  a  certain  class  of  writers  fastening 
their  attention  merely  upon  pohtical  action  say,  when 
they  observe  that  a  political  act  or  law  restricts  freedom, 
that  freedom  has  been  impaired  or  lessened;  yet  they 
do  not  go  further  and  ask  what  effect  it  has  had  upon 
economic  freedom.  We  have  to  consider  the  two  to- 
gether, and  it  is  a  matter  of  fact,  as  anyone  can  find 
out  by  inquiry,  that  political  restriction  often  means 
economic  freedom.  The  restrictions  upon  our  actual 
freedom  are  chiefly  of  an  economic  character. 

Now  in  order  to  understand  what  industrial  liberty 
means  we  have  to  consider  both  the  political  restric- 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    135 

tions  upon  liberty  and  those  restrictions  which  are 
economic  in  nature.  So  this  brings  before  us  a  vital 
question  in  socialism.  And  the  important  question, 
which  is  so  often  overlooked  by  the  socialists  and  their 
opponents,  is  this:  Will  authority  be  more  wisely  exer- 
cised when  seated  in  government  or  when  seated  in 
private  property?  Will  authority  be  more  wisely  exer- 
cised when  it  is  political  in  nature  or  when  it  is  eco- 
nomic in  nature?  ^  Now  it  is  chiefly  economic  in  nature. 
Will  it  be  more  wisely  exercised  if  it  become  political? 
And  another  question  is.  Will  authority  be  more  wisely 
exercised  when  it  has  a  mixed  source,  partly  in  economic 
and  partly  in  political  institutions?  ^ 

Furthermore,  Property  is  exclusive  in  its  nature  and 
not  absolute.  A  phrase  is  found  in  Roman  law  which,  as 
a  definition  of  property,  is  misleading.  The  phrase  is, 
"Dominium  est  jus  utendi  et  abutendi  re."  Some  have 
said  that  it  means  that  the  right  of  property  carries 
with  it  the  right  to  use  or  to  abuse  a  thing,  and  so  it  has 
been  actually  claimed  that  property  is  the  right  to  use 
or  misuse  a  thing,  and  that  the  right  of  property  carries 
with  it  the  right  to  make  a  bad  use  of  things.  But  such 
an  idea  comes  from  bad  translation.  Abutendi  means 
to  use  up  or  consume  a  thing,  not  to  abuse  it,  and  that 
has  been  conclusively  shown  by  Knies  ^  in  his  discussion 
of  the  subject.  While  it  means  the  right  of  using  up  or 
consuming,  the  Roman  law  never  intended  to  give  any- 
one the  right  of  misusing  a  thing.  This  right  might 
have  existed  in  spite  of  the  intent  of  the  law,  but  it  was 
contrary  to  the  spirit  of  the  law  to  give  the  right.  It 
might  have  existed  because  it  could  not  be  prevented. 


136    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

but  it  was  never  sanctioned.^  Wagner  also  calls  atten- 
tion to  the  fact  that,  added  to  the  phrase,  "Jus  utendi 
et  ahutendi  re,"  is  the  generally  ignored  clause,  "qua- 
tenus  juris  ratio  patitur,"  "in  so  far  as  the  reason  of  law 
permits."  But  Wagner  claims  that  while  ahutendi  may 
mean  simply  to  consume,  it  does  carry  with  it  at  least 
a  suggestion  or  implication  of  misuse.^ 

The  right  of  property  is  an  exclusive  right,  but  it  has 
never  been  an  absolute  right.  In  so  far  as  the  right  of 
property  existed  it  was  an  exclusive  right,  that  is,  it  ex- 
cluded others;  but  it  was  not  a  right  without  limita- 
tions or  qualifications.  Notice  the  distinction  between 
exclusive  and  absolute. 

The  truth  is,  there  are  two  sides  to  private  property, 
the  individual  side  and  the  social  side.  The  social  side 
of  property  finds  illustration  in  the  right  of  eminent 
domain  and  in  the  right  of  taxation.  If  there  were  no 
such  thing  as  the  social  side  of  private  property,  how 
could  the  right  of  taxation  exist?  Take  whatever  theory 
you  please.  Suppose  you  say  that  the  right  of  taxation 
is  payment  for  protection.  I  say,  '  I  do  not  want  any 
protection,'  and  if  my  right  in  private  property  is  an 
absolute  right,  is  not  that  sufficient,  provided,  further- 
more, that  I  ask  no  privileges?  The  fact  that  I  do  not 
want  protection  does  not  give  me  exemption,  and  it 
shows  at  once  that  there  is  another  side  to  private  prop- 
erty than  the  individual  side. 

So  also  with  the  right  of  eminent  domain.  It  is  ut- 
terly incompatible  with  the  absolute  right  of  private 
property.  Moreover,  this  social  side  of  private  property 
is  not  to  be  regarded  as  something  exceptional.    On  the 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    137 

contrary  it  is  an  essential  part  of  the  institution  itself. 
It  is  just  as  much  a  part  of  private  property,  as  it  exists 
at  the  present  time,  as  the  individual  side  is  a  part  of  it. 
The  two  necessarily  go  together,  so  that  if  one  perishes 
the  other  must  perish.  The  social  side  limits  the  indi- 
vidual side,  and  as  it  is  always  present  there  is  no  such 
thing  as  absolute  private  property.  An  absolute  right 
of  property,  as  the  great  jurist,  the  late  Professor  von 
Ihering  says,  would  result  in  the  dissolution  of  society. 

The  footpaths  through  the  fields  and  forests  so  often 
found  in  Germany,  which,  open  to  the  general  public, 
add  so  much  to  the  joy  of  life  in  that  country,  have  been 
referred  to  before,  and  may  serve  as  illustrations  here. 
Another  illustration  of  the  social  side  of  private  prop- 
erty may  be  taken  from  the  chapter  on  ''Rural  Life  in 
England,"  in  Washington  Irving's  Sketch  Book,  *'The 
stile  and  the  footpath  leading  from  the  churchyard, 
across  pleasant  fields,  and  along  shady  hedge  rows, 
according  to  an  immemorial  right  of  way."  ^ 

All  there  is  in  these  illustrations  is  the  simple  recog- 
nition of  the  social  side  of  private  property;  and  they 
do  not  signify  that  anyone  has  or  should  have  a  right  to 
walk  over  fields  generally.  The  social  side  of  private 
property  in  the  United  States  very  seldom  carries  with 
it  that  right.  That  is  only  one  development  of  this 
social  side  existing  at  a  particular  time  and  a  particular 
place. 

These  public  rights,  namely,  the  open  footpaths 
through  English  fields  and  German  forests,  doubtless 
had  their  origin  partly  in  necessity.  They  suggest  at 
least  a  slight  resemblance  or  analogy  to  the  right  of  way 


138    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

acquired  by  a  modern  railway  company  through  exer- 
cise of  the  right  of  eminent  domain;  for  this  also  is 
based  on  necessity.  Even  now  one  may  ''travel  on 
lands  adjoining  a  highway  when  the  road  is  founder- 
ous."  ^ 

In  the  case  of  the  German  forests,  ancient  common 
rights, — for  example,  the  right  of  estover  or  the  right 
to  gather  firewood,  etc., — probably  have  a  connection 
with  present  rights.  These  public  rights  constitute  in 
these  cases  what  is  technically  called  an  easement  or 
servitude,  to  use  the  term  taken  from  the  Roman  law. 
But  to  give  them  a  name  and  make  them  a  distinct 
right  does  not  alter  the  fact  that  they  represent  the 
social  side  of  private  property.  All  the  rights  together 
constitute  the  full  rights  of  property. 

Furthermore  it  must  be  pointed  out  with  emphasis 
that  the  great  definitions  of  private  property  do  not 
give  the  right  of  absolute  use,  or  that  if  they  do  there 
are  limitations  found  elsewhere  in  the  codes  which  give 
the  definitions.  Let  us  consider  a  few  of  these  defini- 
tions of  private  property. 

First,  let  us  direct  our  attention  to  the  definition  of 
ownership  or  property  as  given  in  Sohm's  Institutes 
of  Roman  Law  under  ''The  Conception  of  Ownership." 
Sohm  expresses  himself  as  follows: 

"Ownership  is  a  right,  unlimited  in  respect  of  its  contents, 
to  exercise  control  over  a  thing.  The  difference,  in  point 
of  conception,  between  ownership  and  the  jura  in  re  aliena 
is  this,  that  ownership,  however  susceptible  of  legal  limita- 
tions (e.  g.  through  rights  of  others  in  the  same  thing),  is 
nevertheless  absolutely  unlimited  as  far  as  its  own  contents 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    139 

are  concerned.  As  soon  therefore  as  the  legal  limitations 
imposed  upon  ownership — whether  by  the  rights  of  others  or 
by  rules  of  public  law — disappear,  ownership  at  once,  and 
of  its  own  accord,  reestablishes  itself  as  a  plenary  control. 
This  is  what  is  sometimes  described  as  the  'elasticity'  of 
ownership."    [Sohm's  Institutes,  tr.  Ledlie,  3d  ed.  §  61,  p.  309.] 

It  will  readily  be  perceived  that  the  term  absolute 
is  misleading.  When  it  is  said  that  the  right  is  unlim- 
ited ''as  far  as  its  own  contents  are  concerned,"  it  is 
merely  stated  that  it  is  unlimited,  so  far  as  it  is  unlim- 
ited; for  all  conceivable  limitations  are  compatible 
with  this  definition.  The  one  valuable  thought  in  this 
definition  is  the  externality  of  the  limitations  upon 
ownership. 

Second,  let  us  consider  the  great  Prussian  code  of  the 
eighteenth  century,  framed  at  the  time  of  Frederick 
the  Great.  It  is  given  in  A.  L.  R.  (das  Allgemeine 
Landrecht)  Teil  I,  Titel  8,  §  I.  The  English  transla- 
tion of  this  would  be:  ''The  proprietor  is  that  one  who 
is  competent  directly  himself,  or  indirectly  through  an 
agent,  to  exercise  control  over  the  substance  of  a  thing 
or  of  a  right,  to  the  exclusion  of  others."  But  in  sec- 
tion 27  it  is  added:  "No  one  may  misuse  his  property 
to  injure  others."^  Here  appears  the  idea  of  misuse  and 
of  what  misuse  may  carry  with  it,  and  it  opens  the  door 
to  any  amount  of  development  of  the  social  side  of  pri- 
vate property,  because  anything  which  we  deem  would 
injure  others  we  might  call  a  misuse.  There  would 
seem  to  be  simply  no  limit  whatever  to  the  develop- 
ment of  what  may  come  under  this  second  clause. 

Notice  that  "the  proprietor  is  that  one  who  exer- 


140    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

cises  a  control  over  the  substance  of  a  thing  or  of  a 
right."  The  idea  is  that  property  includes  rights  as 
well  as  material  things.  Also  notice  that  it  is  "the 
proprietor  directly  himself  or  indirectly  through  an 
agent."  This  would  sharply  distinguish  property  from 
possession;  if  it  were  mere  possession,  as  conceived  by 
the  theoretical  anarchists  and  advocated  by  them,  it 
would  read:  ''One  who  is  competent  himself  to  exercise 
control  over  the  substance  of  a  thing."  But  property 
means  something  more  than  that.  It  means  to  control, 
directly  himself,  or  indirectly  through  an  agent,  or  in 
any  way,  provided  we  do  not  injure  others  by  a  misuse 
of  the  property.^" 

We  take  up  next  the  definition  found  in  the  Napole- 
onic code.  Art.  544.  "Property  is  the  right  of  using 
things  and  of  controlling  them  in  the  most  absolute 
manner,  provided  that  one  does  not  make  a  use  of  them 
prohibited  by  the  laws  or  ordinances."  ^^ 

Notice  that  the  words  employed  to  describe  the  right 
of  the  proprietor  are  stronger  than  those  found  in  the 
Prussian  code.  The  Napoleonic  code  was  to  a  great 
extent  under  the  influence  of  the  Roman  or  Civil  Law. 
But  perhaps  it  is  also  in  the  nature  of  the  French  mind 
to  express  the  right  of  a  private  individual  in  a  more 
unrestricted  and  unguarded  manner.  ^^ 

In  the  Napoleonic  code  stronger  terms  are  used  to 
describe  the  right  of  individual  proprietors,  but  notice 
that  it  says,  "property  is  the  right  of  using  things  and 
of  controlling  them  in  the  most  absolute  manner,  pro- 
vided one  does  not  make  a  use  of  them  prohibited  by  the 
laws  and  ordinances."     What  is  added  qualifies  what 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    141 

goes  before,  or  may  do  it  under  the  proper  circum- 
stances, for  what  is  there  that  cannot  be  prohibited  by 
the  laws  and  ordinances?  It  is  conceivable,  at  any  rate, 
that  any  sort  of  use  one  could  mention  may  be  pro- 
hibited by  the  laws  and  ordinances.  According  to  this, 
we  may  pass  ordinances  against  this  or  that  use,  and  still 
have  something  left  which  we  may  call  private  property. 
The  definition  begins  by  assigning  unlimited  rights,  and 
then  takes  back  what  has  been  given;  it  follows,  there- 
fore, that  it  is  impossible  to  have  that  which  the  first 
clause  gives. 

Let  us  take  up  next  the  definition  of  Lord  Erskine 
who  says:  ''The  sovereign  or  real  right  is  that  of  prop- 
erty, which  is  the  right  of  using  and  disposing  of  a  sub- 
ject as  our  own  except  in  so  far  as  we  are  restrained  by 
law  or  paction;"  ^^  and  then  that  of  Lord  Mackenzie 
who  similarly  says:  ''Property  is  a  right  to  the  absolute 
use,  enjoyment,  and  disposal  of  a  thing,  without  any 
restraint,  except  what  is  imposed  on  the  owner  by  law 
or  paction."  "  We  notice  in  both  cases  again  the  same 
qualifying  phrase.  The  right  of  the  individual  or  pri- 
vate owner  is  stated  very  strongly,  and  then  a  qualify- 
ing clause  is  added. 

The  definition  in  the  new  civil  code  of  the  German 
Empire  simply  says  that  a  proprietor  has  a  right  to  use 
a  thing  as  he  sees  fit,  to  the  exclusion  of  others,  in  so 
far  as  there  are  no  limitations  which  come  through  law 
or  through  the  rights  of  third  persons.  This  is  again 
very  much  the  same  thing.  ^^ 

The  late  Professor  von  Scheel,  of  the  Bureau  of  Sta- 
tistics of  Berhn,  in  his  article  on  "Property"  in  the 


142    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

German  Dictionary  of  Political  Science,  gives  several 
definitions  of  property;  and  ttien  add^  that  in  some  of 
them  the  Hmitations  are  impUed  though  not  expressed. 
But  as  already  stated,  if  the  hmitations  are  not  in  the 
definitions  themselves,  they  are  in  other  parts  of  the 
law.  He  says  that  these  definitions,  which  give  the 
views  of  the  most  distinguished  jurists,  when  they  are 
reduced  to  their  essence,  simply  say  that  property  is  the 
right  of  control  subject  to  limitations  by  the  legal  order. 
If  property  is  simply  the  right  of  control  subject  to 
limitations  by  the  legal  order,  what  is  there,  asks  Pro- 
fessor von  Scheel,  to  distinguish  it  from  other  rights? 
There  are  other  rights  of  an  economic  order  which 
he  mentions.  Now  what  distinguishes  property  from 
other  rights  is  not  the  absence  of  limitations,  not  that 
these  other  rights  are  limited  and  property  is  unlimited, 
but  the  fact  that  property  right  is  the  basis  of  other 
rights  in  things  (lease,  etc.)-  Then  he  quotes  another 
writer  ^^  to  the  effect  that  what  is  essential  in  property 
is  not  full  and  absolute  control,  but  the  fact  that  prop- 
erty has  a  strong  tendency  to  develop  into  full  and  ab- 
solute control.  And  these  definitions  would  point  to 
such  a  development  as  natural. 

Or  we  may  say,  in  other  words,  that  the  social  side 
of  private  property  will  fail  to  receive  adequate  recognition 
and  development  unless  an  active  conscious  effort  is  made 
to  bring  this  about.  We  all  know  how  easily  the  general 
public  loses  its  rights,  because  the  general  public  is  apt 
to  be  less  watchful  than  private  individuals,  and  it  re- 
quires a  considerable  development,  such  as  we  see  in 
recent  years  in  England,  in  order  to  protect  the  social 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    143 

side  of  property.  All  these  definitions  give  this  idea, 
that  the  right  of  property  is  the  right  of  exclusive  con- 
trol in  so  far  as  the  laws  and  ordinances  do  not  establish 
limits.  Thus  there  is  a  tendency  on  the  part  of  pro- 
prietors having  influence  to  remove  these  laws  and  or- 
dinances and  lessen  their  significance  in  one  way  or 
another,  and  with  these  removed,  we  have  a  develop- 
ment into  full  and  absolute  control  except  in  so  far  as 
property  may  be  restricted  on  general  principles.  ^^ 

Now  one  thing  which  suggests  itself  is  this.  If  prop- 
erty does  not  carry  with  it  the  right  of  misuse,  how  does 
it  happen  that  so  much  misuse  is  tolerated?  ^^  We  see 
property  wasted  and  destroyed,  and  we  see  the  law 
taking  no  steps  to  prevent  the  apparent  waste  and 
misuse.  The  fact  is  just  this:  The  misuse  or  the  abuse 
of  things  is  not  a  part  of  the  right  of  property  when  we 
reduce  property  to  its  essence,  but  it  is  something  which 
may  exist  because  no  way  can  be  devised  to  prevent 
it  without  interfering  with  the  institution  of  property. 
It  is  difficult  to  frame  laws  which  will  prevent  a  misuse 
without  at  the  same  time  preventing  a  proper  use.  But 
we  hold  that  the  law  may  go  as  far  as  possible  in  pre- 
venting a  misuse. 

At  this  point,  it  is  well  to  distinguish  between  the 
abuse  or  misuse  of  property  in  a  positive  way  to  injure 
or  interfere  with  others  and  the  abuse  in  a  negative  way 
in  wasting  or  destroying  economic  goods.  It  is  a  maxim 
of  the  law  that  one  must  not  use  his  property  to  injure 
others,  and  while  this  cannot  always  be  prevented,  the 
law  does  much  already.  It  is  more  difficult  to  deal  with 
misuse  of  the  second  kind.    Nevertheless,  it  is  a  part  of 


144    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  nature  of  property  that  a  misuse  should  be  pre- 
vented, and  if  anyone  can  suggest  any  way  of  pre- 
venting a  misuse,  then  the  law  may  step  in.  But  we 
have  to  do  two  things.  We  have  to  prevent  misuse  as 
far  as  practicable,  and  that  must  always  fall  far  short 
of  what  is  desirable;  then  so  far  as  what  remains  is  con- 
cerned we  have  to  appeal  simply  to  the  individual  and 
social  conscience.  We  have  to  tell  a  proprietor  that  the 
selfish  use  he  is  making  of  his  property  is  not  according 
to  the  idea  of  property  and  that  it  behooves  him  to 
mend  his  conduct.  We  virtually  say  to  him,  'We  see 
no  way  in  which  we  can  prevent  this  misuse  without  at 
the  same  time  preventing  a  proper  use,  so  we  must 
appeal  to  your  individual  conscience.'  While  this  is 
all  we  can  do  for  the  time  being,  we  do  not  give  up  the 
right  of  preventing  by  legal  force  this  misuse,  if  any 
way  can  be  discovered  of  accomplishing  that  end,  with- 
out at  the  same  time  causing  greater  evils. 

The  riper  a  people,  the  more  can  be  done  to  develop  the 
social  side  of  private  property  and  to  prevent  waste  and 
misuse.  Abuses  of  individuals  and  the  failure  to  re- 
spect proper  rights  of  private  owners  render  difficult 
many  developments  which  could  otherwise  take  place. 
''Give  them  an  inch  and  they  take  an  ell."  Picnics 
on  private  land  afford  an  illustration.  Many  a  good- 
natured  owner  of  beautiful  picnic  grounds  on  the  shore 
of  a  lake  or  in  a  fine  forest  has  allowed  the  general  pub- 
lic the  right  to  use  his  property,  for  picnics,  only  to 
find  his  generosity  so  abused  as  to  oblige  him  to  with- 
draw the  privilege.  And  in  cases  of  this  sort  private 
rights  must  first  be  protected  and  safe-guarded,  for  on 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    145 

them  depends  our  food  supply  and  the  satisfaction  of 
our  primary  wants,  until,  at  any  rate,  we  are  ready  to 
abandon  our  existing  order  for  socialism  or  some  other 
new  economic  order. 

Private  property,  then,  does  not  carry  with  it  the 
right  of  misuse;  this  right  cannot  be  recognised  and  is 
the  last  thing  which  belongs  to  the  idea  of  private  prop- 
erty. One  of  the  arguments  advanced  against  private 
property  is  that  it  carries  with  it  the  right  of  abuse; 
but  if  that  is  no  part  of  the  institution  itself,  one  who 
demands  its  abolition  must  first  show  that  we  cannot 
have  the  institution  without  such  abuse  or  misuse  as 
to  outweigh  its  advantages.  Some  readers  may  think 
this  all  fanciful;  that  the  right  of  misuse  does  exist;  and 
that  we  see  men  everywhere  who  do  not  recognise  the 
fact  that  their  private  property  has  any  social  side. 
Some  might  also  ask,  '  What  evidence  can  you  produce 
of  any  effort  to  prevent  misuse? '  We  have  already 
replied  in  part  to  this  objection.  Misuse  exists  and  must 
continue  to  exist  indefinitely  because  it  is  so  difficult  to 
prevent  misuse  without  at  the  same  time  preventing  a 
proper  and  legitimate  use;  but  in  so  far  as  a  way  can  be 
found  for  preventing  misuse,  that  way  will  be  resorted 
to;  sooner  or  later,  with  the  progress  of  time,  and  to  an 
increasing  extent,  abuse  and  misuse  will  be  restrained. 
When  we  have  done  our  utmost,  however,  there  will  be 
still  left  opportunity  for  abuse,  because  we  cannot  draw 
up  any  general  scheme  of  law  and  administration  which 
will  altogether  prevent  abuse.  And,  as  already  stated, 
when  we  have  reached  this  point  we  must  simply  appeal 
to  the  individual  conscience. 


146    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

But  the  writer  has  before  him  a  brief  description  of 
a  case  in  which  the  court  recognised  the  fact  that  abuse 
was  not  a  part  of  the  institution  of  property.  It  was 
a  case  which  came  before  the  Indiana  Supreme  Court, 
and  is  a  noteworthy  one.^^  Suit  had  been  brought 
against  a  Mr.  Townsend  for  burning  natural  gas  in 
flambeau  lights  contrary  to  the  statute  of  the  State. 
This  statute  reads  in  part,  ''The  use  of  natural  gas  for 
illuminating  purposes,  in  what  are  known  as  flambeau 
lights,  is  a  wasteful  and  extravagant  use  thereof,  and 
is  dangerous  to  the  public  good."  The  appellant  con- 
tended that  the  statute  was  unconstitutional,  because 
in  opposition  to  the  Fourteenth  Amendment  to  the 
Federal  Constitution.  But  the  Indiana  Supreme  Court 
sustained  the  decision  of  the  lower  court  that  the  law 
was  constitutional,  saying,  ''The  act  in  no  way  de- 
prives the  owner  of  the  full  and  free  use  of  his  property. 
It  restrains  him  from  wasting  the  gas  to  the  injury  of 
others,  to  the  injury  of  the  public."  Ownership  of  nat- 
ural gas  was  likened  to  ownership  of  wild  animals,  game 
or  fish;  and  because  of  the  similarity  between  these  two 
kinds  of  property  the  Indiana  court  quoted  from  a  de- 
cision made  by  the  Supreme  Court  of  Minnesota  in  the 
case.  State  v.  Rodman:  -°  "We  take  it  to  be  the  correct 
doctrine  in  this  country  that  the  ownership  of  wild 
animals,  so  far  as  they  are  capable  of  ownership,  is  in 
the  State,  not  as  proprietor,  but  in  its  sovereign  ca- 
pacity, as  the  representative,  and  for  the  benefit,  of  all 
its  people  in  common.  ...  It  (the  State)  may  adopt 
any  reasonable  regulations,  not  only  as  to  time  and  man- 
ner in  which  such  game  may  be  taken  and  killed,  but  also 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    147 

by  imposing  limitations  upon  the  right  of  property  in 
such  game  after  it  has  been  reduced  to  possession." 
Thus  the  Indiana  court  held  that,  though  gas  brought 
to  the  surface  in  pipes  is  the  property  of  the  owner  of 
the  pipes,  yet  this  property  right  is  limited  by  the  right 
of  the  State  to  prevent  waste  which  is  damaging  to  the 
public. 2^ 

But  some  have  gone  too  far  in  the  interpretation  of 
this  decision  of  the  Indiana  Supreme  Court,  and  a  re- 
cent decision  of  the  Supreme  Court  of  the  United  States 
of  May  15,  1911,  calls  a  halt,  as  it  were,  and  warns  us 
that  the  court  is  very  keen  in  its  watchfulness  over 
the  individual  side  of  private  property.  Mr.  Justice 
McKenna,  in  delivering  the  opinion  of  the  court,  said 
in  reference  to  a  later  but  similar  Indiana  case:  -- 

"Ohio  Oil  Co.  V.  Indiana  was  a  writ  of  error  to  the  Supreme 
Court  of  Indiana  to  review  a  judgment  of  that  court  which 
sustained  a  statute  which  prohibited  any  one  having  the 
control  or  possession  of  any  natural  gas  or  oil  well  to  permit 
the  gas  or  oil  therefrom  to  escape  into  the  open  air,  and 
restrained  the  Oil  Company  from  violating  the  statute. 
Against  the  statute  was  urged  the  rights  of  property  assured 
by  the  Fourteenth  Amendment  of  the  Constitution  of  the 
United  States.  The  case  is  a  valuable  one  and  clearly  an- 
nounces the  right  of  an  owner  to  the  soil  beneath  it  and  the 
relation  of  his  rights  to  all  other  owners  of  the  surface  of  the 
soil.  The  right  of  taking  the  gas,  it  was  said,  was  common 
to  all  owners  of  the  surface,  and  because  of  such  a  common 
right  in  all  land  owners  an  unlimited  use  (against  a  wasteful 
use  the  statute  was  directed)  by  any  it  was  competent  for 
the  State  to  prohibit.  This  limitation  upon  the  surface 
owners  of  property  was  justified  by  the  peculiar  character 
of  gas  and  oil,  they  having  the  power  of  self-transmission. 


148    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  that  therefore  to  preserve  an  equal  right  in  all  surface 
owners  there  could  not  be  an  unlimited  right  in  any.  Gas 
and  oil  were  likened  to,  not  made  identical  with,  animals 
ferce  natures  and,  like  such  animals,  were  subject  to  appro- 
priation by  the  owners  of  the  soil,  but  also,  like  them,  did 
not  become  property  until  reduced  to  actual  possession. 

"But  an  important  distinction  was  pointed  out.  In  things 
ferce  naturce,  it  was  observed,  all  were  endowed  with  the  power 
of  reducing  them  to  possession  and  exclusive  property.  In 
the  case  of  natural  gas  only  the  surface  proprietors  had  such 
power,  and  the  distinction,  it  was  said,  marked  the  difference 
in  the  extent  of  the  State's  control.  'In  the  one  as  the  pub- 
lic are  the  owners,  every  one  may  be  absolutely  prevented 
from  seeking  to  reduce  to  possession.  No  devesting  of  private 
property,  under  such  a  condition,  can  be  conceived  because 
the  public  are  the  owners,  and  the  enactment  by  the  State 
of  a  law  as  to  the  public  ownership  is  but  the  discharge  of 
the  governmental  trust  resting  in  the  State  as  to  property 
of  that  character.  Geer  v.  Connecticut,  supra  (161  U.  S.  519). 
On  the  other  hand,  as  to  gas  and  oil,  the  surface  proprietors 
within  the  gas  field  all  have  the  right  of  reducing  to  possession 
the  gas  and  oil  beneath.  They  could  not  be  absolutely  de- 
prived of  this  right  which  belongs  to  them  without  a  taking 
of  private  property.  And  this  right,  it  was  further  said, 
was  coequal  in  all  of  the  owners  of  the  surface  and  that  the 
power  of  the  State  could  be  exerted  for  the  purpose  of  pro- 
tecting all  the  collective  owners,  by  securing  a  just  distribu- 
tion, to  arise  from  the  enjoyment  by  them,  of  their  privilege 
to  reduce  to  possession  and  to  reach  a  like  end  by  preventing 
waste.  And  further  characterizing  the  statute,  it  was  said, 
viewed  as  one  to  prevent  the  waste  of  the  common  property 
of  the  surface  owners  it  protected  their  property,  not  devested 
them  of  it.  And  special  emphasis  was  given  to  this  conclu- 
sion by  the  comment  that  to  assert  that  the  right  of  the 
surface  owner  to  take  was  under  the  Fourteenth  Amendment 
a  right  to  waste,  was  to  say,  that  one  common  owner  may 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY  149 

devest  all  the  others  of  their  rights  without  wrongdoing,  but 
the  lawmaking  power  cannot  protect  all  the  owners  in  their 
enjoyment  without  violating  the  Constitution  of  the  United 
States.' 

"The  statute  of  Indiana  was  directed  against  waste  of  the 
gas,  and  was  sustained  because  it  protected  the  use  of  all  the 
surface  owners  against  the  waste  of  any.  The  statute  was 
one  of  true  conservation,  securing  the  rights  of  property, 
not  impairing  them.  Its  purpose  was  to  secure  to  the  com- 
mon owners  of  the  gas  a  proportionate  acquisition  of  it,  a 
reduction  to  possession  and  property,  not  to  take  away  any 
right  of  use  or  disposition  after  it  has  thus  become  property. 
It  was  sustained  because  such  was  its  purpose;  and  we  said 
that  the  surface  owners  of  the  soil,  owners  of  the  gas  as  well, 
could  not  be  deprived  of  the  right  to  reduce  it  to  possession 
without  the  taking  of  private  property.  It  surely  cannot 
need  argument  to  show  that  if  they  could  not  be  deprived 
of  the  right  to  reduce  the  gas  to  possession  they  could  not  be 
deprived  of  any  right  which  attached  to  it  when  in  posses- 
sion." ^^ 

Among  other  things,  we  should  especially  notice  the 
emphasis  which  the  Supreme  Court  of  the  United  States, 
following  the  Supreme  Court  of  Indiana,  lays  upon  a  cer- 
tain likeness  between  the  natural  gas  and  wild  animals 
which  have  to  be  actually  captured  or  reduced  to  pos- 
session before  the  right  of  private  property  is  fully  estab- 
Hshed.  It  is  not  to  be  inferred  that  this  reasoning 
would  necessarily  apply  in  full  measure  in  the  case  of 
objects  over  which  the  rights  of  property  have  already 
been  extended. 

Long  as  this  quotation  is,  its  importance  as  an  in- 
terpretation of  the  opinion  of  the  majority  of  the  court 
as  to  the  actual  law  in  the  United  States,  justifies  its 


150    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

reproduction  here.  It  must  be  safely  anticipated  that 
in  time  to  come  the  power  to  prevent  waste  will  be  more 
fully  asserted  by  our  courts,  and  that  thus  the  social 
side  of  private  property  will  receive  further  develop- 
ment. 

Waste  is  not  allowed  in  the  case  of  water  in  Colorado. 
The  laws  of  that  State  make  it  the  duty  of  the  water 
commissioner  to  prevent  water  being  wastefully,  ex- 
travagantly, and  wrongfully  used  in  any  ditch.  The 
statute  reads: 

''The  water  commissioners  of  the  several  water  districts 
of  this  state  are  hereby  empowered,  and  it  is  hereby  made 
their  duty,  upon  the  application  of  the  owners  of  one  or  more 
ditches  in  their  district,  to  immediately  make  or  cause  to  be 
made,  a  thorough  examination  of  all  ditches  within  their 
district  for  the  purpose  of  ascertaining  what  use  is  being  made 
by  the  owners  or  consumers  of  water  from  said  ditches;  and 
if  at  any  time  he  shall  ascertain  that  the  owner  or  owners 
of  any  ditch  drawing  water  from  the  natural  streams  furnish- 
ing water  to  his  district  shall  be  permitting  any  of  the  waters 
flowing  in  such  ditch  to  go  to  waste,  or  to  be  wastefully,  or 
extravagantly  or  wrongfully  used  by  its  water  consumers, 
or  put  to  any  use  than  that  to  which  it  is  entitled  to  be  used 
in  the  order  of  priority,  at  such  times  as  the  same  is  being 
needed  by  other  appropriators,  it  shall  be  the  duty  of  such 
water  commissioners  immediately  to  shut  off  the  supply  of 
water  in  such  ditch  to  such  an  extent  as  in  his  judgment  was 
wasted,  or  extravagantly,  wastefully  or  wrongfully  used."  ^* 

The  extent,  however,  to  which  commissioners  may  go 
to  prevent  waste  is  a  subject  of  controversy. 

In  France  and  also  ordinarily  in  the  United  States 
a  man  may  be  restrained  from  setting  fire  to  his  house. 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY  151 

In  the  former  country  a  spendthrift  may  also  by  an 
appeal  on  the  part  of  his  relatives  be  restrained  from 
wasting  his  property;  and  in  Massachusetts  a  guardian 
may  be  appointed  for  a  spendthrift;  it  is  the  same  in 
many  other  States;  possibly  in  our  country  one  could 
likewise  make  an  appeal  to  the  court,  and  perhaps  our 
courts,  on  the  ground  of  public  policy,  could  in  one  way 
or  another  issue  an  injunction  against  the  waste  of 
property  by  private  owners  if  it  were  clearly  a  mahcious 
waste.  An  insane  man  can  always  be  restrained  and  the 
care  of  property  removed  from  him.  Now  it  is  true 
that  this  idea  has  not  been  very  well  developed.  Pro- 
fessor Charles  Gide  says  it  is  probably  due  to  a  super- 
stitious respect  for  the  sacred  rights  of  property.  We 
might  rather  say,  it  is  due  to  a  misapprehension  in  re- 
gard to  what  are  the  sacred  rights  of  property,  owing 
to  a  failure  to  recognise  the  social  side  of  private  prop- 
erty along  with  the  individual  side. 

Another  attribute  which  is  sometimes  ascribed  to 
property  is  perpetuity.  The  statement  is  made  by  Pro- 
fessor H.  von  Scheel  as  a  characteristic  of  property  that 
it  is  unlimited  in  time,  that  is,  not  dependent  upon  a 
definite  time;  in  other  words,  it  is  perpetual,  and  its 
duration  is  not  dependent  upon  any  event  or  upon  the 
legal  action  of  another  person  without  the  consent  of  the 
possessor.  This  same  idea  is  apparent  in  Austin's  def- 
inition. Austin  defines  property  or  dominium  in  a 
''strict  sense"  as  denoting  a  right — indefinite  in  point 
of  user,  etc.  But  he  also  mentions  various  other  uses 
of  the  term,  one  of  these  denoting  "a  right  indefinite 
in  point  of  user,  but  limited  in  duration;  for  example,  a 


152    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

life  interest  in  movables."  ^^  It  is  on  account  of  this 
idea  that  property  must  be  perpetual  that  Professor  von 
Scheel  does  not  accept  the  concept  "intellectual  prop- 
erty" which  is  used  in  Germany  and  England.  The 
term  "intellectual  property"  means  property  in  books, 
in  inventions,  patents  and  copyrights,  property  in  the 
product  of  one's  intellect.  This  property  is  a  limited 
property,  copyrights  extending  only  over  an  extreme 
period  of  fifty-six  years  (twenty-eight  years  but  re- 
newable for  twenty-eight  years  more)  in  the  United 
States  "^^  and  having  a  varying  but  limited  duration  in 
other  countries.  But  it  is  the  opinion  of  the  author 
that  to  deny  to  copyrights,  patents,  etc.,  the  title  prop- 
erty is  a  mistake,  for  he  agrees  with  Professor  Wagner  ^^ 
who  considers  such  property  as  true  property.  Why 
does  property  need  to  be  perpetual?  If  by  property 
we  mean  exclusive  control,  why  need  that  exclusive 
control  continue  for  ever?  If  I  have  property  for  fifty- 
six  years,  and  have  full  and  exclusive  control  for  that 
period,  a  control  subject  to  no  one  else,  then  I  have  the 
full  rights  of  property.  Of  course,  if  I  had  only  the  right 
to  use  a  thing  for  fifty-six  years,  over  which  somebody 
else  had  a  higher  right,  that  would  be  a  different  matter. 
That  would  be  a  lease,  a  contract  right  or  limited  in- 
heritance or  some  other  limited  right.  But  here  the 
thing  itself  expires  in  fifty-six  years.  My  right  does  not 
pass  over  to  another  but  becomes  a  free  good.  The 
single  copy  of  a  book  which  I  hold  in  my  hand  will  be 
property  indefinitely  until  it  is  all  used  up  and  con- 
sumed,— a,  thousand  years,  if  you  please;  but  the  in- 
tellectual property  is  not  the  paper  or  the  cover  of  the 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY   153 

book;  it  consists  in  a  certain  expression,  a  form  given  to 
certain  ideas,  and  that  may  expire  in  twenty-eight 
years  or  in  fifty-six  years,  or  a  longer  period  as  the  case 
may  be.  It  is  intellectual  property,  and,  it  seems  to  the 
author,  is  full  property,  but  it  is  property  limited  in 
point  of  time.  No  valid  reason  appears  why  we  cannot 
have  many  kinds  of  property  with  varying  duration, 
which  after  that  duration  expire  and  become  free  goods. 
At  the  end  of  the  fifty-six  years  at  the  most  anyone 
in  the  United  States  may  make  copies  of  a  book;  hke- 
wise  he  may  use  an  invention  when  the  patent  expires. 

We  must  here  as  elsewhere  recognise  evolution;  we 
are  developing  an  increasing  number  of  limited  rights. 
Limitation  is  one  of  the  more  significant  and  essential 
things  in  the  development  of  property  rights.  Limi- 
tations make  it  possible  to  review  and  revise  rights 
later  when  larger  experience  and  increasing  knowledge 
give  more  abundant  light.  Property  has  undergone 
changes  in  the  past  and  is  still  undergoing  changes  now. 
We  cannot  look  far  into  the  future  to  see  what  will  be 
the  probable  development;  therefore  we  cannot  attrib- 
ute eternity  to  property  even  in  the  limited  sense  in 
which  we  use  the  term.  Why  then  should  we  refuse  the 
name  of  property  to  economic  rights  which  have  a 
definite  duration,  which  are  strictly  limited  in  duration? 
If  these  rights  during  the  time  of  their  duration  partake 
of  all  the  characteristics  of  property,  if  they  give  ex- 
clusive control  over  things  and  rights  for  a  certain  time, 
why  should  they  not  be  called  property? 

If  one  pleases  one  can  classify  property  with  respect 
to  duration, — property  of  unlimited  duration,  property 


154    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  indefinite  duration  (newer  franchises,  during  good 
behaviour,  so  to  speak),  and  property  definitely  limited 
in  time,  say,  twenty  years,  fifty  years,  etc. 

We  now  pass  on  to  the  varying  intensivity  of  'prop- 
erty, of  which  mention  has  already  been  made  in  a 
general  way.  Property  extends  to  various  kinds  of 
things  and  various  sorts  of  rights.  It  extends  to  mov- 
ables and  immovables  especially,  and  this  is  one  of  the 
most  important  distinctions.  But  it  must  not  be  sup- 
posed that  we  have  the  same  laws  for  all  kinds  of  prop- 
erty, for  these  laws  vary  with  the  varying  intensivity 
of  property.  This  is  a  point  which  has  been  made  by 
various  modern  writers;  among  them  by  Professor 
Emile  de  Laveleye  who  brings  out  this  point  in  the 
following  words:  ''It  is  for  economic  reasons  also  that 
rights  of  property  are  more  or  less  extensive,  ^^  accord- 
ing to  the  different  objects  to  which  they  refer;  being 
almost  absolute  in  relation  to  objects  which  are  mova- 
bles, but  already  limited  when  we  come  to  arable  land, 
and  still  more  restricted  for  houses  and  forests  and  fi- 
nally for  mines  and  railways  closely  hedged  in  by  the 
intervention  of  public  authority." ^^ 

Professor  de  Laveleye  gives  certain  classes  of  objects, 
as  we  see,  which  differ  from  each  other  with  regard  to 
the  intensivity  of  property.  He  says  that  property  is 
almost  absolute  as  far  as  movables  are  concerned,  being 
more  limited  when  we  come  to  arable  land;  and  still 
more  when  we  come  to  forests,  houses,  mines,  and  rail- 
ways. Professor  Wagner  brings  this  out  in  his  discus- 
sion of  mining  property,  showing  that  property  in  treas- 
ures under  the  ground  has  in  Prussia  and  elsewhere 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY   155 

been  separated  from  property  in  arable  land,  and  that 
private  property  in  undiscovered  treasures  beneath  the 
ground  has  very  generally  been  abolished.  That  is,  the 
property  in  treasures  beneath  the  soil  is  properly  public 
property  and  its  use  is  allowed  to  individuals  upon  pre- 
scribed conditions.  It  does  not  follow  necessarily  that 
because  a  man  owns  the  surface  of  the  land  he  there- 
fore owns  the  natural  treasures  below  the  surface. 
The  rule  is  quite  to  the  contrary, ^^^  England  and  the 
United  States  being  excepted,  and  even  in  the  United 
States  we  are  moving  away  from  this  idea  which  has 
seemed  to  those  brought  up  under  the  influence  of 
Anglo-American  traditions  to  be  grounded  in  the  na- 
ture of  things. ^^ 

The  railways  in  the  United  States  also  illustrate  our 
proposition.  In  American  railways  the  stockholders 
have  a  kind  of  property  which  is  as  little  intensive  as 
any  sort  of  property  that  could  be  mentioned,  because 
we  have  so  developed  the  social  side  of  private  prop- 
erty as  to  confuse  those  who  have  not  grasped  the  gen- 
eral principles,  and  they  call  this  property  quasi-public 
or  sometimes  simply  public.  The  former  is  not  entirely 
incorrect,  and  may  not  be  altogether  objectionable  but 
the  latter  is  certainly  incorrect,  as  has  been  well  brought 
out  in  decisions  of  the  Supreme  Court  of  the  United 
States,  which  hold  that  although  the  property  is  dedi- 
cated to  a  public  use,  it  is  private,  and  consequently  to 
deprive  its  owners  by  legislation  of  a  fair  return  on  it 
is  confiscation  of  private  property. ^^  Although  we  have 
in  this  case  developed  the  social  side  of  private  property, 
there  is  really  no  occasion  for  confusing  it  with  public 


156    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

property.  It  is  not  public  property  but  private  prop- 
erty. The  income  from  railways  flows  into  private 
pockets.  They  are  managed  for  private  gain.  And  the 
real  difference  is  simply  in  the  degree  in  which  the  so- 
cial side  is  developed.  But  American  railways  are  not 
public  property,  for  public  property  is  property  owned 
by  pubUc  authority,  and  owned  in  the  interest  of  the 
general  public. ^^ 

Emile  de  Laveleye  gives,  as  we  have  seen,  a  rough  or 
informal  sort  of  classification  of  the  objects  of  property 
with  respect  to  the  intensivity  of  property.  In  the 
United  States  we  would  make  a  somewhat  different 
arrangement,  because  our  mining  property  is  more  in- 
tensive; but  in  saying  this  we  speak  about  the  property 
in  treasures  beneath  the  ground.  When  the  treasures 
have  once  been  seized,  once  taken  out  of  the  ground 
and  separated  from  the  ground,  then  they  become  mov- 
ables, and  there  is  a  very  intensive  sort  of  property  in 
these  treasures.  Thus  in  Prussia  if  a  man  opens  up 
natural  treasures  below  the  surface  of  the  ground,  when 
he  takes  them  out  of  the  mine  in  accordance  with  the 
law,  he  has  then  property  in  movables  which  is  prop- 
erty as  intensive  as  will  be  found  anywhere. 


Notes  and  References  to  Chapter  V 

iP.  133,  p.  11. 

2  P.  133.  And  thus  exercised  indirectly  through  government. 

'  P.  135.  It  should  be  observed  that  the  author  does  not  claim  to 
have  mentioned  all  sources  of  authority.  Other  tremendous  sources 
are  those  found  in  family  and  religion:  consider  for  example  China 
and  Turkey  as  illustrations  of  the  force  of  parental  authority  and 
of  a  religion  with  fatalism  as  one  of  its  main  characteristics.  Ex- 
treme socialists  claim  that  property  dominates  the  state  in  which 
it  finds  its  sources:  property  is  everything!  This  brings  us  back 
again  to  a  crude  materialistic  interpretation  of  history. 

*  P.  135.  Knies,  Geld,  p.  88:  discussed  by  Wagner  in  his  Grundle- 
gung,  3d  ed.,  Vol.  II,  pp.  37-38. 

^  P.  136.  For  the  view  that  "jus  utendi  et  abutendi"  does  not 
give  the  right  of  misuse,  but  only  the  right  of  consuming  or  using  up, 
see  also  Moralphilosophie,  by  Viktor  Cathrein,  4th  ed.,  Vol.  II, 
p.  310,  note  1. 

^  P.  136.  In  Valentin  Meyer's  Eigenlum  nach  den  verschiedenen 
Weltanschauungen  the  extreme  individualism  of  the  treatment  of 
property  by  the  Romans  is  discussed  critically  and  suggestively. 
On  the  one  hand,  the  private  owner  abused  his  rights  outrageously: 
on  the  other  hand,  he  was  at  times  called  upon  to  make  unwarranted 
sacrifices  and  was  inadequately  protected  against  confiscation. 
There  was  a  dualism  of  private  rights  and  state  rights  which  only 
in  modern  times  has  been  replaced  by  the  social  theory  of  property, 
a  unified  concept  which  is  large  enough  to  include  both  individual 
and  social  rights.  On  property  among  the  ancient  Romans,  v.  Meyer, 
ibid.,  pp.  11-13.  The  whole  first  chapter,  entitled  "Das  Altertum" 
is  well  worth  reading. 

'  P.  137.  Another  similar  illustration  is  taken  from  an  article 
which  appeared  in  the  Outlook.  Speaking  about  church-going  in 
England  the  writer  says: 

"Church-going  is  aided  by  the  advantages  for  pedestrianism 
which  England  affords.  There  are  footpaths  across  the  fields,  easy 
to  discover,  which  are  as  truly  highways  for  the  pedestrian,  as  the 

157 


158    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

road  is  for  the  carriage,  and  whereon  the  pedestrian  has  as  much 
legal  right  as  on  the  pubUc  road.  Here  in  the  Isle  of  Wight  the 
Downs  are  all  open  to  the  public;  and  one  may  walk  for  miles  over 
the  green  elastic  turf,  where  walking  is  in  itself  a  luxury. 

"One  reason  for  this  larger  liberty  of  the  pedestrian  is  that  the 
Englishman  stands  up,  not  only  for  his  own  rights,  but  for  the  rights 
of  the  pubUc  as  represented  in  himself.  In  Scotland  for  years  the 
moors  have  been  open  and  unfenced.  Latterly  landlords  are  at- 
tempting to  shut  out  the  public  in  order  to  preserve  them  more 
effectually  for  game.  But  the  public  declines  to  be  shut  out.  I 
had  a  conversation  on  this  subject  with  an  Englishman  whose  sweet 
pacific  temper  is  known  on  both  sides  of  the  Atlantic.  He  is  sum- 
mering in  Scotland,  and  is  a  great  pedestrian.  The  gamekeepers 
every  now  and  then  undertake  to  warn  him  off  the  moors.  'I  al- 
ways,' he  said,  'give  the  gamekeeper  my  card,  and  tell  him  that  he 
is  quite  right  to  obey  orders,  but  I  am  quite  right  to  disregard  them. 
But  if  his  master  thinks  I  am  trespassing,  he  can  bring  a  suit  against 
me.'  I  have  since  learned  that  the  rambling  clubs  of  Scotland, 
of  which  there  are  many,  have  met  with  the  same  difficulty,  have 
issued  the  same  challenge  to  the  landlords — not  always  in  so  gracious 
a  spirit — to  take  the  issue  into  the  courts  for  decision,  but  the  land- 
lords never  have  ventured  to  accept  the  invitation. 

"  A  little  more  sturdy  resistance  and  a  little  less  lazy  good-nature 
would  improve  the  American. 

"L.  A. 
"Editorial  Correspondence" 

The  Outlook,  Sept.  14,  1895. 

8  P.  138.  See  article  "Judicial  Construction  of  the  Fourteenth 
Amendment"  by  Mr.  Justice  Francis  J.  Swayze  in  the  Harvard  Law 
Review  for  November,  1912,  p.  15. 

'P.  139.  "Eigentiimer  heisst  derjenige,  welchcr  befahigt  ist, 
iiber  die  Substanz  einer  Sache  oder  eines  Rechtes  mit  Ausschliessung 
anderer,  aus  eigener  Macht,  durch  sich  selbst  oder  durch  einen 
Dritten,  zu  verfugen."  But  in  paragraph  27  it  is  added:  "Niemand 
darf  sein  Eigentum  zur  Krankung  oder  Beschadigung  anderer 
missbrauchen." 

10  P.  140.  Here  and  in  this  entire  chapter  the  author  owes  a  great 
deal  to  the  lectures  of  his  teacher.  Professor  Knies. 

"P.  140.  "La  propri^t^  est  le  droit  de  jouir  et  de  disposer  des 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    159 

choses  de  la  maniere  la  plus  absoluc,  pourvu  qu'on  n'en  fasse 
un  usage  prohibe  par  les  lois  ou  par  les  reglements." 

12  P.  140.  We  may  so  look  at  these  two  codes  from  the  social 
standpoint  that  the  Napoleonic  code  will  seem  a  far  less  liberal 
code  than  that  of  Frederick  the  Great.  It  is  of  interest  to  students 
of  history  to  note  that  the  code  of  Frederick  the  Great  was  a  very 
liberal  one.  It  was  better,  in  many  respects,  than  modern  codes 
since  that  time.  It  protected  the  rights  of  private  owners,  but  in 
general  to  an  unusual  degree  the  rights  of  the  comparatively  weak 
and  defenceless  members  of  the  community  as  well.  It  also  pro- 
tected the  rights  of  women  to  a  greater  extent  than  many  other 
codes,  and  the  rights  of  illegitimate  children.  So  that  the  present 
German  code  is  in  some  respects  a  retrogression  as  compared  with 
the  code  of  Frederick  the  Great,  which  we  may  call  a  broad,  humane 
and  progressive  code  of  laws.  In  this  connection  one  should  read 
Dr.  Anton  Menger's  Das  hurgerliche  Recht  und  die  besitzlosen  Volks- 
klassen  upon  which  the  present  writer  largely  bases  his  view  of  this 
code. 

1*  P.  141.  Lord  Erskine.  Quoted  by  Macleod,  Elements  of 
Economics,  Vol.  I,  p.  143. 

"  P.  141.  Lord  Mackenzie,  Roman  Law,  p.  171. 

15  P.  141.  Das  Burgcrliche  Gesetzbuch,  p.  195.  "  Der  Eigentumer 
einer  Sache  kann,  soweit  nicht  das  Gesetz  oder  Recht  Dritter  ent- 
gegenstehen,  mit  der  Sache  nach  Belieben  verfahren  und  andere 
von  jeder  Einwirkung  ausschhessen."  Cf.  Das  neue  biirgerliche 
Recht,  by  Dr.  Franz  Bernhoft,  3ter  Bd.  Erster  Teil,  Zweiter  Ab- 
schnitt,  das  Eigentum,  §  20,  der  Begriff,  pp.  50-55.  See  §  1136 
of  the  text  of  Das  Biirgerliche  Gesetzbuch. 

1*  P.  142.  Dernburg,  Lehrbuch  des  preussischen  Privatrechts, 
§181. 

"  P.  143.  Professor  John  R.  Commons,  in  his  Distribution  of 
Wealth  (p.  93)  states  this  when  he  says  that  private  property  is 
the  residual  claimant  of  rights.  He  takes  the  full  rights  over  a 
thing,  then  sets  aside  certain  of  them  and  what  is  left  is  property. 
He  has  a  long  arrow  representing  the  total  rights  of  property,  definite 
and  indefinite,  then  sets  off  certain  definite  rights  and  what  is  left 
over  is  property.  From  the  full  rights  of  property  he  first  sets 
off  public  partial  rights.  What  are  these?  Eminent  domain,  right 
of  way,  taxation,  nuisance,  public  policy  (which  is  very  indefinite), 


160     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

fines,  forfeitures,  etc.  These  are  various  public  partial  rights  which 
have  to  be  taken  away  from  the  total  rights  of  property.  Then  we 
have  private  partial  riglits.  There  is  the  right  of  easement,  of  leases, 
mortgages,  trusts,  contracts,  inheritance.  Then  after  we  have 
taken  away  these  definite  rights,  there  is  still  something  left  over, 
the  residuum,  that  is  dominium,  or  the  right  of  private  property. 
The  same  would  hold  with  regard  to  public  property.  When  the 
pubhc  has  property  we  have  to  set  aside  an  indefinite  residuum 
also. 

This  idea  of  Professor  Commons  is  brought  out  in  a  definition  of 
property  found  in  a  work  by  Wordsworth  Donisthorpe  called 
Individualism,  which  Professor  Commons  quotes,  "Property  is  all 
those  indefinite  uses  over  a  thing  which  remain  over  after  the  defi- 
nite or  specific  uses  of  others  have  been  deducted." 

1^  P.  143.  This  topic  has  in  recent  years  been  treated  by  advo- 
cates of  Conservation,  notably  by  President  Van  Hise  in  his  excel- 
lent book.  The  Conservation  of  Natural  Resources  in  the  United 
States.  See  also  the  article  by  Mr.  Justice  Andrew  A.  Bruce  on  "The 
Conservation  of  our  Natural  Resources  and  of  our  National  Strength 
and  Virility"  in  the  University  of  Pennsylvania  Law  Review  (Dec, 
1909).  The  present  chapter  long  antedates  the  Conservation 
movement,  for  it  was  substantially  in  its  present  form  in  the  autumn 
of  1898. 

19  P.  146.  Townsend  v.  The  State,  147  Ind.  624;  47  N.  E.  19 
(1897).  Cf.  Mr.  Justice  Bruce's  discussion  of  this  and  similar  cases, 
pp.  140  et  seqq.  in  art.  cited. 

2"  P.  146.  58  Minn.  393  (1894). 

21  P.  147.  Cf.  an  article  in  The  Petroleum  Gazette,  Titusville,  May 
27,  1897,  for  a  popular  presentation  of  this  case,  giving  the  view 
of  an  organ  of  interested  parties. 

22  P.  147.  Ohio  Oil  Co.  v.  Indiana,  177  U.  S.  190  (1900). 

23  P,  149.  In  the  case  of  Oklahoma  v.  Kansas  Natural  Gas  Co., 
221U.  S.  229atp.252(1911). 

2«  P.  150.  Revised  Statutes  of  Colorado,  1908,  §  3438. 

^  P.  152.  Austin,  Lectures  on  Jurisprudence  (London,  1863), 
Vol.  II,  pp.  477-8. 

29  P.  152.  Formerly  twenty-eight  years,  and  renewable  for  a 
period  of  fourteen  years.  At  present  twenty-eight  years,  and  re- 
newable for  a  period  of  twenty-eight  years  by  the  terms  of  the 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY   161 

Act  of  March  4,  1909  (Statutes  at  Large,  Vol.  XXXV,  Pt.  1,  pp. 
1075-1088). 

2^  P.  152.  Professor  Wagner  discusses  this  in  his  Grundlegung; 
he  considers  copyright  as  property,  as  "geistiges  Eigentum". 

^  P.  154.  According  to  our  terminology,  this  should  be  "in- 
tensive". 

29  P.  154.  See  his  book  Luxury  (Sonnenschein  Social  Science 
Series),  chapter  on  "Law  and  Morals  in  Pohtical  Economy," 
pp.  159-60. 

'"  P.  155.  This  will  find  more  detailed  treatment  in  the  author's 
Landed  Property  and  the  Rent  of  Land,  in  the  discussion  of  mineral 
treasures. 

But  we  give  here  and  now  the  following  acts  and  recommenda- 
tions as  illustrations  of  a  rapidly  growing  movement  in  the  United 
States. 

Chapter  318  of  an  Act  to  provide  for  Agricultural  Entries  on  Coal 
Lands  (U.  S.  Statutes  1910,  Vol.  36:583)  contains  this  provision: 

"That  from  and  after  the  passage  of  this  Act  unreserved  pubHc 
lands  of  the  United  States  exclusive  of  Alaska  which  have  been 
withdrawn  or  classified  as  coal  lands,  or  are  valuable  for  coal,  shall 
be  subject  to  appropriate  entry  under  the  homestead  laws  by  actual 
settlers  only  .  .  .  whenever  such  entry,  selection,  or  withdrawal 
shall  be  made  with  a  view  of  obtaining  or  passing  title,  with  a  reser- 
vation to  the  United  States  of  the  coal  in  such  lands  and  of  the  right 
to  prospect  for,  mine  and  remove  the  same.  .  .  . 

"Sec.  3.  That  upon  satisfactory  proof  of  full  compliance  with  the 
provisions  of  the  laws  under  which  entry  is  made,  and  of  this  Act, 
the  entryman  shall  be  entitled  to  a  patent  to  the  land  entered  by 
him,  which  patent  shall  contain  a  reservation  to  the  United  States 
of  all  the  coal  in  the  lands  so  patented  together  with  the  right  to 
prospect  for,  mine  and  remove  the  same." 

The  Act  of  June  25,  1910,  gave  the  President  the  power  tempora- 
rily to  withdraw  from  location  and  entry  any  of  the  public  lands 
of  the  United  States  in  Alaska,  "and  reserve  the  same  for  water 
power  sites,  irrigation,  classification  of  lands,  or  other  public  purpose 
to  be  specified  in  the  orders  of  withdrawals."  (U.  S.  Statutes  1910, 
Vol.  36:847,  Chap.  421,  Sec.  1). 

In  his  report  for  1911  Secretary  of  the  Interior  Fisher  made  the 
following  recommendation : 


162   PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

"I  also  recommend  the  enactment  of  legislation  to  permit  the 
disposition  of  the  surface  of  lands  containing,  or  believed  to  con- 
tain, deposits  of  oil,  under  appropriate  land  laws,  reserving  to  the 
United  States  for  future  disposition  the  deposits  of  oil  therein." 
(Report,  p.  11.) 

"In  fact,  the  enlarged  application  of  the  leasing  principle  to  the 
public  domain,  generally  will,  in  my  judgment,  more  effectively 
promote  development  and  protect  the  public  interest  than  the  pres- 
ent system.  Certainly  coal,  oil,  gas,  asphalt,  nitrate,  and  phosphate 
lands  can  be  more  appropriately  developed  by  leasehold  than  by 
the  present  system  of  classification  and  sale  of  the  fee  which  prevails 
with  respect  to  coal.  Many  of  the  Western  States  have  recognized 
and  are  acting  upon  this  principle."    {Op.  cit.,  p.  10.) 

In  another  place  it  is  stated  that  surface  agricultural  land  is  not 
cultivated  because  people  hold  the  land  for  the  unearned  increment 
which  they  expect  when  the  natural  resources  on  said  land  are  ex- 
ploited. This  results  in  retarding  the  surface  development  of  our 
lands. 

"Permission  for  the  development  of  water  power  on  navigable 
streams  and  from  non-navigable  streams  on  the  public  domain 
should  be  granted  by  the  Federal  Government  only  on  payment 
to  it  of  rentals  which  should  be  readjusted  at  periodic  intervals 
of  no  longer  than  a  decade  under  general  provisions  which  will 
protect  the  interests  of  the  investor  and  of  the  pubhc."  (Op.  cit., 
p.  14.) 

Secretary  Fisher  adds  that  the  permits  should  provide  that  the 
grantee  will  submit  to  reasonable  regulation. 

Along  similar  lines  the  Commissioner  of  the  General  Land  Office 
has  recommended  the  following  legislation: 

"Entry  for  town  site  purposes  of  lands  valuable  for  coal,  oil  or 
gas,  should  be  permitted,  with  provision  whereby  the  Government 
will  retain  the  title  to  the  coal,  oil  or  gas  contents  of  the  lands  so 
entered,  in  like  manner  as  such  deposits  or  contents  are  excepted 
from  conveyance  by  the  act  of  Congress  approved  June  27,  1910 
(36  Stat.  583)."  (Report  of  Commissioner  of  General  Land  Office 
for  1911,  p.  123.) 

"  P.  155.  In  Germany  property  in  land  in  general  carries  with 
it  rights  upward  indefinitely  and  downward  indefinitely;  but  with 
important  restrictions  in  the  general  interest.    One  of  these  is  that 


ATTRIBUTES  AND  CHARACTERISTICS  OF  PROPERTY    163 

the  owner  of  land  cannot  prevent  the  use  of  the  air  space  above  his 
land  or  the  earth  beneath,  when  he  has  no  interest  to  forbid  such  use. 
He  may  forbid  the  postal  authorities,  for  example,  to  attach  wires 
to  his  house  or  to  erect  poles  on  his  land.  He  is  entitled  to  no 
damages  when  the  wires  go  through  the  air  at  a  sufficient  height 
above  his  garden.  No  payment  can  be  demanded  for  fictitious 
damages  in  the  case  of  the  use  of  the  air  above  or  the  earth  under 
the  surface  of  the  land.  {Das  Burgerliche  Gesetzbuch,  §  905,  Satz  2.) 
It  is  likewise  in  general  provided  (§  226)  that  a  right  cannot  be 
exercised  simply  to  injure  another.  See  Das  Neue  Burgerliche  Recht 
by  Dr.  F.  Bernhoft,  3ter  Bd.  Ister  Teil,  §  20,  §§  54-55. 

5-'  P.  155.  A  case  in  point  is  that  of  the  Interstate  Commerce 
Commission  v.  The  Chicago  Great  Railway  Co.,  209  U.  S.  108  (1908). 
The  Chicago  Live  Stock  Exchange  had  protested  that  the  giving 
of  a  lower  rate  to  the  packers  on  packing  house  products  than  to 
shippers  of  live  stock,  between  Missouri  and  Chicago,  was  unjust 
discrimination  and  contrary  to  the  public  good.  In  deciding  the 
case  in  favour  of  the  defendants,  Mr.  Justice  Brewer  said,  "It 
must  be  remembered  that  railroads  are  the  private  property  of 
their  owners;  that  while  from  the  public  character  of  the  work  in 
which  they  are  engaged  the  public  has  the  power  to  prescribe  rules 
for  securing  faithful  and  efficient  service  and  equality  between  ship- 
pers and  communities,  yet  in  no  proper  sense  is  the  public  a  general 
manager." 

3^  P.  156.  But  the  public  and  private  nature  of  railways  are  so 
blended  that  considerable  confusion  has  arisen  in  the  decisions  of 
the  courts,  especially  in  regard  to  damages  resulting  from  railway 
accidents.  A  railway's  propertj^,  so  far  as  ownership  and  profits 
are  concerned,  is  private  property.  But  it  is  so  clothed  with  a  pubhc 
interest  that  the  state  has  gone  to  great  length  in  regulating  it, 
even  fixing  rates,  which  is  limiting  property. 

Its  business  is  a  public  convenience,  even  a  necessity;  the  fruits 
of  its  business  are  strictly  private  property.  The  U.  S.  Supreme 
Court  accepted  this  doctrine  in  a  somewhat  extreme  form,  in  West- 
tern  Union  Tel.  Co.  v.  Penn.  R.  R.  et  al,  195  U.  S.  540  (1904),  and 
Mr.  Justice  Harlan,  in  a  vigorous  dissenting  opinion,  set  forth  the 
"social"  view  of  the  nature  of  railway  property.  See  also  Donavon 
V.  Penn.  R.  R.,  199  U.  S.  279  (1905). 

As  to  the  nature  of  railway  property,  see  the  following:  Swan  v. 


164   PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Williams,  2  Mich.  427  (1852);  Trunick  v.  Smith,  63  Pa.  St.  18  (1869); 
Adams  v.  Boston  H.  &  E.  E.  R.  R.  Mass.,  1  Fed.  Cases,  No.  47  (1870) ; 
Leavenworth  County  v.  Miller,  7  Kan.  479  (1871);  Talcott  v.  Pine 
Grove  Tp.,  Mich.,  23  Fed.  Cases,  No.  13,735  (1872);  Atchison, 
Topeka  &  S.  F.  Ry.  v.  U.  S.,  12  Ct.  CI.  295  (affirmed  154  U.  S.  637) 
App.  (1876);  L.  S.  &  M.  S.  Ry.  Co.  v.  C.  &  W.  I.  R.  R.  Co.,  97  III. 
506  (1881) ;  McCoy  v.  C.  I.  St.  L.  &  C.  R.  Co.,  13  Fed.  3  (1882) ;  Rail- 
road Co.  V.  Iron  Works,  31  W.  Va.  710  (1888). 

The  tendency  now  is  towards  emphasising  the  public  nature  of 
railway  property.  The  Interstate  Commerce  Commission  has  had 
its  origin  in  this  desire  of  the  public  to  regulate  railways;  and  the 
greatly  increased  powers  of  that  body  by  recent  legislation  indicate 
the  trend  of  the  hour.  See  list  of  cases  bearing  on  the  authority 
of  the  Interstate  Commerce  Commission  to  regulate  rates,  etc.,  Ap- 
pendix IV.  Consult  also  Haney's  Congressional  Histonj  of  Railways, 
pp.  225  et  seqq.  and  Chap.  XXI  for  a  treatment  of  the  development 
of  Congress's  interpretation  of  the  Commerce  Clause  of  the 
United  States  Constitution,  which  confers  the  right  of  control  of 
interstate  commerce. 


CHAPTER  VI 

THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY:  OR,  PRIVATE 
PROPERTY   A   SOCIAL   TRUST 

We  have  established  the  proposition  that  there  are 
two  sides  to  private  property,  and  that  both  sides  are 
so  essential,  that  if  either  one  is  removed  the  right  of 
private  property  must  cease.  Not  only  is  it  true  that 
if  the  individual  side  is  removed  private  property  ceases, 
but  it  is  just  as  true,  though  generally  this  is  not  fully 
understood,  that  if  the  social  side  of  private  property 
ceases  to  exist,  the  right  must  likewise  cease  to  exist 
because  private  property  then  becomes  an  impossibility, 
inasmuch  as  it  would  destroy  social  life. 

But  we  have  not  yet  squarely  faced  the  question, 
Which  is  dominant?  This  question  we  must  ask  and 
it  must  be  answered.  Which  side  is  to  be  dominant, 
the  social  or  the  individual  side?  One  side  or  the  other 
must  be  dominant,  because  in  the  very  nature  of  things 
the  two  have  to  come  into  contact,  and  one  side  or  the 
other  must  yield  in  case  of  conflict.  We  must  face  this 
question,  and  we  therefore  lay  down  this  proposition, 
which  constitutes  the  social  theory  of  property,  namely: 
Private  property  is  established  and  maintained  for  social 
purposes. 

We  are  not  now  discussing  the  actual  historical  origin 
of  property,  but  rather  its  logical  and  ethical  basis  and 

165 


166    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

justification,  namely,  what  is  the  nature  of  the  institu- 
tion and  what  are  the  reasons  for  its  maintenance? 

Now  what  is  the  proof  of  this  proposition?  The 
proof  is  found  partially  in  the  actual  facts,  present  and 
historical,  of  our  social  life  and  partially  in  the  nature 
of  organised  society  and  its  needs.  We  may  begin  with 
a  very  simple  illustration,  taken  from  comparatively 
modern  history;  namely,  landed  property  in  the  United 
States.  Why  was  landed  property  established  in  the 
United  States?  And  why  has  it  been  maintained? 
Why  is  land  made  private  property  to-day?  We  had 
to  choose  in  regard  to  this.  There  was  a  time  when 
very  little  land  in  our  country  was  private  property. 
For  a  time  after  the  country  became  settled  only  rel- 
atively small  areas  of  land  were  taken  up,  and  even  the 
land  put  under  cultivation  was  not  always  private 
property.  We  had  to  some  extent  the  old  institution  of 
common  property,  common  pasture  land,  and  common 
forests,  etc.  But  gradually  private  property  in  land 
was  extended  and  now  it  is  dominant  throughout  the 
country,  there  being  in  the  older  States  comparatively 
little  land  which  is  still  public  property.^  And  private 
property  was  established  for  social  purposes.  The  argu- 
ments and  discussions  concerning  our  public  domain 
show  this,  more  and  more  clearly  as  time  goes  on.  It 
was  indeed  very  generally  assumed  as  something  so 
self-evident  that  private  property  in  land  would  con- 
serve the  general  interests  of  society  to  a  greater  extent 
than  public  property,  that  the  contrary  view  did  not 
even  occur  ordinarily  in  the  discussions  of  the  subject. 
It  was  a  general  principle  of  our  common  law  that  to 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     167 

every  piece  of  property  should  be  assigned  an  individual 
owner  and  this  view  and  way  of  looking  at  rights  was 
greatly  strengthened  by  the  individuaUsm  of  the  fron- 
tier. It  was  felt  to  be  right  that  the  individuals  who 
settled  the  domain  should  own  it;  and  this  is  still  the 
belief  of  the  vast  majority  of  Americans  who  give  their 
approval  to  the  institution  of  private  property  in  land; 
although  now  there  are  those  who  say  it  is  not  a  good 
institution.  These  are,  however,  a  small  minority 
compared  with  the  w^hole  population.  This  institution 
of  private  property  was  not  estabhshed  secretly.  The 
thing  was  not  done  in  a  corner  in  any  hidden  manner. 
There  was  no  conspiracy  about  it.  It  was  all  open  and 
above  board.  And  it  was  established  because  Americans 
believed  that  private  property  was  better  than  public 
property,  holding  that  the  people  as  a  whole  would  de- 
rive the  greatest  benefit  thereby. 

Now,  however,  arguments  are  brought  forward  by 
those  who  think  that  private  property  in  land  is  not  the 
best  institution  and  that  not  being  the  best  institution, 
it  does  not  promote  to  so  great  a  degree  the  general 
public  weal  as  some  other  institution  would.  These 
arguments  have  produced  an  impression  and  the  result 
is  that  a  desire  is  felt  by  many  not  to  go  so  fast  in  con- 
verting our  pubhc  domain  into  private  property,  in 
making  the  change  from  public  to  private  property  in 
land.  And  so  here  and  there  in  the  United  States  we 
are  beginning  to  move  a  little  more  slowly  in  this  par- 
ticular. In  some  of  the  North-western  States  as  in  the 
Dakotas  there  are  legislative  and  constitutional  pro- 
visions, making  it  more  difficult  to  change  from  public 


168    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

property  to  private  property  than  it  has  been  hereto- 
fore by  putting  a  high  price  on  pubUc  school  lands  and 
providing  that  they  must  not  be  sold  until  they  reach 
the  established  price.  ^  The  people  who  have  been  in- 
strumental in  bringing  about  these  changes  do  not 
generally  accept  the  proposition  that  public  property 
in  land  is  better  than  private  property,  but  they  desire 
that  a  portion  of  the  increment  in  land  values  shall 
accrue  immediately  and  directly  to  the  general  public, 
holding  that  the  increment  is  partly  due  to  the  general 
social  growth.  Still  more  recently  the  Conservation 
movement  has  strengthened  the  feeling  that  we  must 
proceed  cautiously  in  changing  public  property  in  land 
into  private  property,  especially  in  the  case  of  mineral 
lands  and  forests. 

When  we  turn  to  other  countries  we  find  that  the 
arguments  of  those  who  oppose  private  property  in 
land  have  produced  a  still  stronger  impression  than 
they  have  in  the  United  States.  Under  the  influence  of 
the  belief  that  private  property  in  land  was  preferable 
to  public  property,  and  under  the  influence  of  English 
economic  thought,  in  the  middle  of  the  nineteenth 
century,  Prussia  began  to  sell  her  public  domain,  fol- 
lowing in  American  footsteps,  except  that  she  charged 
the  market  value  for  the  land  which  was  sold.  This 
policy  continued  for  some  time  in  Germany,  Belgium, 
and  elsewhere,  and  then  came  a  reaction.^  There  were 
those  who  said  in  effect,  'We  are  not  sure  about  the 
proposition  laid  down  by  Adam  Smith  and  others  that 
the  private  cultivation  of  land  is  better  than  cultivation 
under  public  authority."*    We  are  not  so  convinced  of 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     169 

that  as  we  once  were.  We  see  that  in  some  cases  pubHc 
cultivation  is  as  fruitful  as  private  cultivation,  in  some 
cases  more  so,  for  example,  forests.  We  see  also  that 
under  public  authority  land  can  be  leased  as  advanta- 
geously as  by  private  individuals.  So  let  us  keep  the 
public  land  which  we  have.    Let  us  not  part  with  that.' 

But  very  generally  those  who  hold  the  opinion  that 
private  property  in  land  is  desirable  have  separated 
forest  land  from  arable  land  in  so  far  as  property  is  con- 
cerned, and  have  come  to  the  conclusion  that  not  pri- 
vate property  but  public  property  is  desirable  as  the 
dominant  form  of  property  in  the  case  of  forests.  In 
the  case  of  mineral  lands  in  the  United  States,  the  view 
of  conservationists,  following  opinions  of  economists 
previously  laid  down,  is  inclined  to  favour  public  owner- 
ship. 

New  Zealand  and  other  Australian  colonies  also 
illustrate  the  trend  of  world  opinion.  They  have  gone 
further  than  Americans  have  or  than  any  European 
state  has  in  the  effort  to  retain  public  property,  and 
even  have  changed  back  property  from  private  to  pub- 
lic, New  Zealand  having  purchased  some  great  estates 
in  order  to  break  up  concentration  in  the  private  owner- 
ship of  land,  besides  taking  various  other  measures  to 
the  same  end.^ 

1  The  point  of  the  argument  is  this :  That  in  every  case 
it  is  the  social  purpose  which  is  dominant  or  becomes 
dominant  and  which  controls  the  institution  of  private 
property  in  land.  If  it  were  clearly  perceived  by  the 
people  that  public  property  is  better  than  private  prop- 
erty, then  we  would  have  public  property  in  land.    It 


170   PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

is  the  social  purpose,  the  general  welfare  which  has  been 
in  control.  It  is  not  generally  as  a  result  of  conscious 
processes  on  the  part  of  the  many  that  the  general  wel- 
fare triumphs,  but  as  a  result  of  a  social  philosophy 
which  few  in  the  past  could  have  stated.  Doubtless 
in  Athens  in  the  time  of  Aristotle  few  reached  the  con- 
clusion by  a  process  of  reasoning  that  slavery  promoted 
the  general  welfare.  The  Stagirite  presented  this 
theory  in  his  social  philosophy,  but  social  purpose  be- 
comes clearer  and  clearer  to  an  ever  widening  circle. 
Private  influence,  to  be  sure,  can  make  itself  felt,  more 
or  less,  sometimes  properly,  sometimes  improperly. 
But  the  general  view  in  regard  to  public  interest  will 
ultimately  carry  the  day. 

When  we  consider  the  establishment  of  new  kinds  of 
property,  we  see  very  clearly  that  it  is  the  social  pur- 
pose which  decides  the  matter.  "  Intellectual  property" 
as  seen  in  copyrights,  trade-marks  and  patents  affords 
proof.  Until  quite  recently  the  United  States  had  only 
national  copyright,  and  did  not  allow  foreigners  to  ac- 
quire American  copyright  for  their  books.  Arguments 
were,  however,  brought  forward  for  the  extension  of 
intellectual  property,  and  a  few  years  ago  copyrights 
were  made  international  by  the  United  States,  follow- 
ing the  previous  practice  of  other  countries.  The  argu- 
ments largely  turned  upon  the  social  welfare.  So  also 
with  trade-marks  and  with  patents.  There  was  no 
effective  patent  law  in  Germany  until  some  forty  years 
ago,  when  the  German  Empire  was  established,  and  it 
was  argued  that  by  the  absence  of  such  a  law  Germany 
suffered.    In  the  United  States  social  utility  was  urged 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      171 

in  behalf  of  international  copyright.  And  the  argu- 
ment of  individual  justice  was  also  brought  forward; 
for  it  was  held  unjust  that  Americans  should  enjoy  the 
results  of  the  toil  of  an  author  and  give  him  no  reward 
for  his  labour.  But  is  this  "justice"  anything  else  but 
social  welfare?  It  certainly  includes  it.  And  the  one 
who  argued  the  question  mainly  on  individual  grounds, 
always  had  arguments  to  show  that  the  interest  of  soci- 
ety would  be  promoted  by  the  desired  reform. 

And  whj^  should  the  duration  of  these  rights  be  lim- 
ited,— the  right  of  property  in  books  and  the  right  of 
property  in  inventions,  etc.?  What  are  the  arguments 
advanced  for  the  limitation  of  these  rights?  Nothing 
but  the  general  welfare.  We  make  a  sacrifice  for  the 
time  being  in  order  to  reward  the  inventor  or  the  author 
because  we  think  that  thereby  the  social  welfare  will  be 
promoted  and  inventions  will  be  stimulated,  but  we  do 
not  propose  to  suffer  the  disadvantages  of  monopoly 
in  regard  to  these  things  for  more  than  a  limited  term 
of  years.  We  do  not  hold  that  the  rule  of  reasonable 
returns  demands  that  we  should  do  more.^ 

A  still  more  important  and  convincing  kind  of  proof 
is  seen  in  arguments  defending  private  property  when 
attacked  as  a  whole,  or  when  any  particular  species  of 
private  property  is  attacked.  Those  who  urge  the  de- 
fence of  private  property  feel  it  incumbent  upon  them  to 
show  that  because  private  property  as  a  whole  or  a  par- 
ticular species  of  private  property  does  promote  the  gen- 
eral welfare,  it  is  therefore  worth  while  to  maintain  the 
institution ;  and  in  these  arguments  designed  to  show  the 
benefits  resulting  to  society  from  private  property  we 


172    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

find  these  proofs  brought  out.  The  arguments  of 
Henry  George  and  of  the  sociahsts,  and  also  those  of 
John  Stuart  Mill  afford  illustration.  They  all  endeav- 
our to  show  that  private  property  in  land  is  or  is  not 
more  beneficial  than  public  property. 

But  that  is  not  all.  We  have  something  that  is  per- 
haps even  more  convincing.  Laws  and  institutions  at 
present  clearly  assert  the  superiority  of  the  claims  of 
society  over  those  of  the  individual.  Whenever  con- 
flict is  clearly  perceived  between  the  general  public 
interest  and  the  individual  interest  with  respect  to  prop- 
erty, and  when  at  the  same  time  a  way  to  prevent  harm 
is  clearly  perceived,  then  there  is  no  hesitation.  The 
individual  has  to  yield  his  claim  every  time.  It  is  not 
always  perceived  how  harm  can  be  averted,  but  when- 
ever it  can  be  prevented  the  individual  side  has  to 
yield  to  the  social.  As  previously  seen,  abuses  exist, 
not  because  they  are  part  of  the  institution,  but  be- 
cause no  way  has  as  yet  been  perceived  of  removing 
them  by  general  rule;  and  laws  must  operate  by  general 
rule.  When  we  go  beyond  this,  as  already  stated,  we 
have  nothing  left  but  appeal  to  the  individual  con- 
science. 

The  institution  of  eminent  domain  affords  further 
illustration.  What  does  it  mean?  It  means  precisely 
this, — that  there  is  a  conflict  between  the  individual 
interest  and  the  public  interest.^  The  use  of  certain 
land  is  required  for  public  purposes  and  the  individual 
use  of  that  land  is  injurious  to  society.  That  is,  it 
keeps  society  from  carrying  forward  certain  undertak- 
ings which  society  deems  important  and  valuable.    So 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     173 

the  individual  side  of  property  has  to  give  way  to  the 
social  side.  Private  property  disappears  and  public 
property  takes  its  place.  The  individual  may  insist 
very  strongly  that  he  desires  to  retain  his  property.  He 
may  say,  'It  is  my  property,  and  I  am  attached  to  it; 
it  belonged  to  my  father  and  to  my  grandfather  before 
him.  You  offer  me  compensation  but  I  do  not  care 
about  that.  What  I  want  is  this  particular  property.' 
But  however  much  he  may  protest  he  has  to  give  it  up. 
And  increasing  use  of  eminent  domain  and  demands 
for  its  further  extension  have  this  basis.^  Probably  no- 
where has  this  point  been  brought  out  more  clearly 
than  by  Mr.  Justice  Holmes,  in  the  following  utterance : 

"...  The  dogma  of  equality  makes  an  equation  between 
individuals  only,  not  between  an  individual  and  the  com- 
munity. No  society  has  ever  admitted  that  it  could  not 
sacrifice  individual  welfare  to  its  own  existence.  If  con- 
scripts are  necessary  for  its  army,  it  seizes  them,  and  marches 
them,  with  bayonets  in  their  rear,  to  death.  It  runs  highways 
and  railroads  through  old  family  places  in  spite  of  the  owner's 
protest,  paying  in  this  instance  the  market  value,  to  be  sure, 
because  no  civilized  government  sacrifices  the  citizen  more 
than  it  can  help,  but  still  sacrificing  his  will  and  his  welfare 
to  that  of  the  rest."  ^ 

There  are  public  purposes  and  even  private  purposes 
which  make  it  for  the  general  interest  of  society  that 
one  private  party  should  give  way  to  another,  and  even 
in  such  cases  the  exercise  of  the  right  of  eminent  do- 
main is  not  unknown.  In  the  State  of  New  York  and 
probably  in  most  of  our  States,  that  is  the  case  with 
land  which  is  surrounded  by  other  land,  when  a  right 


174     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  way  or  right  of  access  to  the  land  may  be  condemned; 
and  it  generally  obtains  as  a  common  law  right.  In 
New  York  it  is  necessary  to  summon  two  juries,  one  to 
decide  whether  a  right  of  way  is  needed  and  then  an- 
other jury  to  condemn  the  land  and  award  the  dam- 
ages which  must  be  paid.^°  It  is  probable  that  some- 
what similar  arrangements  exist  in  most,  if  not  all,  of 
our  States. 

We  find  further  proof  in  the  sanitary  laws  of  disin- 
fection and  quarantine.  There  the  public  interest  is 
very  sharply  enforced  against  private  property.  Pri- 
vate property  has  to  yield  and  it  is  sometimes  de- 
stroyed, either  with  compensation  (partial  or  complete) 
or  without  compensation.  Boards  of  health  are  usually 
given  arbitrary  power  in  regard  to  contagious  diseases 
and  to  nuisances,  and  the  citizen  who  thinks  himself 
aggrieved  has  no  redress.  The  procedure  is  regulated 
by  statute.  ^^ 

The  laws  with  respect  to  cruelty  to  animals  give  fur- 
ther proof.  An  animal  is  property.  Can  I  not,  therefore, 
do  what  I  will  with  my  own?  The  law  says : '  No,  you 
may  not  do  what  you  will  with  your  own,  because  what 
you  do  offends  the  conscience  of  society.  Your  right 
is  a  limited  but  not  an  absolute  right;  and  therefore 
you  may  not  do  what  you  will  with  your  own.'  It  can- 
not be  replied  that  this  simply  regulates  the  manner 
of  use  and  does  so  in  the  public  interest,  for  this  con- 
cedes the  entire  principle,  because  regulating  the  man- 
ner of  use  for  the  public  interest  is  establishing  the  so- 
cial side  of  private  property  and  making  that  dominant. 
And  that  is  all  we  contend  for, — the  right  of  regulating 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      175 

the  manner  of  use  of  private  property  in  the  public  in- 
terest. The  laws  against  cruelty  to  animals  afford  a 
peculiarily  interesting  development  of  the  theory  that 
society  has  a  real  interest  in  private  property.  The 
courts  not  only  punish  a  cruel  owner  who  maltreats  his 
beast  upon  the  street  or  in  pubUc,  but  the  vigilance  of 
the  law  in  many  states  reaches  the  acts  of  cruelty  com- 
mitted in  private  called  "passive  cruelty".  Over- 
driving and  overloading  horses  and  other  work  animals, 
shooting  captive  pigeons  for  sport,  cock-fighting,  even 
hunting  a  captive  fox,  have  been  declared  cruelty  to 
animals  and  the  offenders  punished.  ^^ 

Or,  consider  certain  laws  which  govern  the  consump- 
tion and  use  of  opium.  May  I  not  do  what  I  will  with 
my  own?  No.  Because  in  this  case  and  in  that  of  in- 
toxicating beverages  what  you  wish  to  do  is  considered 
injurious  to  the  general  public. ^^ 

The  laws  concerning  marriage  also  modify  and  re- 
strict individual  rights  of  property,  and  do  so  for  what 
is  considered  the  general  welfare. 

In  the  laws  which  attempt  to  prevent  suicide  and 
which  punish  attempted  suicide  we  see  clearly  that  the 
right  is  not  recognised  to  do  as  we  will  with  our  own. 
From  these  we  see  also  that  we  cannot  say,  '  The  right  to 
do  what  I  will  with  my  own  proceeds  from  my  right 
over  my  own  person.'  Your  right  over  your  own  person 
is  a  limited  right.  In  New  York  State  and  elsewhere 
legislation  with  respect  to  suicide  punishes  an  unsuc- 
cessful attempt  at  suicide.  On  the  other  hand,  however, 
while  I  may  not  take  my  life,  I  am  compelled  to  yield 
life  itself,  to  give  my  own  person  completely,  for  my 


176    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

country.  So  we  cannot  trace  an  absolute  right  of  pri- 
vate property  to  the  absolute  right  over  one's  person, 
because  on  the  one  hand  we  may  have  to  give  our  life 
for  the  general  welfare,  and  on  the  other  hand  we  must 
not  take  it. 

This  then  is  the  theory  of  the  social  side  of  private 
property:  it  is  what  Professor  von  Ihering  calls  the  Ge- 
sellschaftliche  Eigentumstheorie.  And  by  him  it  is  stated 
in  almost  classical  form  in  these  words: 

"It  is,  therefore,  not  true  that  property  according  to  its 
idea  carries  with  it  an  absolute  right  of  control.  Property 
in  such  a  form  cannot  be  tolerated  by  society  and  never  has 
been  tolerated.  The  idea  of  property  cannot  carry  with  it 
anything  which  is  contrary  to  the  idea  of  society."  ^^ 

It  is  asserted  frequently  by  the  pulpit  and  by  the 
press  that  private  property  is  a  social  trust.  This  is 
a  true  statement.  It  is  true  not  only  in  a  vague  and 
general  way,  but  in  an  economic  and  legal  sense.  We 
have  here  given  us  a  solid  foundation  for  the  doctrine  of 
stewardship.  It  is  possible,  however,  that  to  many  this 
doctrine  of  stewardship  is  agreeable  precisely  in  propor- 
tion as  it  is  vague  and  indefinite.  The  view  here  pre- 
sented gives  us  the  point  of  departure  for  a  criticism  of 
existing  social  institutions,  and  also  for  the  work  of 
social  reconstruction,  and  progress. 

There  are  endless  controversies  about  the  right  to 
regulate  the  use  of  private  property.  Judicial  decisions 
in  regard  to  the  regulation  of  the  use  of  private  property 
are  not  harmonious.  When  regulation  is  allowed,  as  it 
frequently  must  be,  judges  too  often  seem  perplexed  in  re- 
gard to  the  justification  of  the  regulation  and  try  to  bring 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      177 

it  in  by  a  back  door,  so  to  speak.  The  right  to  regulate, 
however,  is  not  an  exception,  but  a  part  of  the  institu- 
tion, and,  as  already  stated,  every  abuse  could  properly 
be  removed  if  a  way  could  be  devised  for  the  removal. 
The  right  to  regulate  is  a  part  of  the  very  idea  of  pri- 
vate property,  and  is  in  the  line  of  an  ideal  development. 
Let  us  take  as  an  illustration  a  decision  given  by  the 
author's  learned  friend  in  Baltimore,  Mr.  Justice  Har- 
lan, of  the  Supreme  Bench  of  Baltimore  City.  There 
was  no  ordinance  in  Baltimore  regulating  the  width  of 
houses  in  any  part  of  the  city,  but  an  ordinance  had 
lately  been  passed  which  provided,  ''That  no  such  per- 
mit shall  be  granted  unless  in  the  judgment  of  the  said 
Judges  of  the  Appeal  Tax  Court,  or  a  majority  of  them, 
the  size,  general  character  and  appearance  of  the  build- 
ing or  buildings  to  be  erected,  will  conform  to  the  gen- 
eral character  of  the  buildings  previously  erected  in  the 
same  locality,  and  will  not  in  any  way  tend  to  depre- 
ciate the  value  of  surrounding  improved  or  unimproved 
property,  etc."  Now  it  appears  that  one  WilHam  H. 
Hampson  proposed  to  build  four  houses  on  a  lot  which 
he  owned  in  Baltimore  City,  running  through  from 
Boundary  Avenue  to  Preston  Street.  He  planned  to 
erect  on  this  lot  two  three-story  houses  with  two-story 
back  buildings  fronting  on  Preston  Street,  one  of  the 
houses  on  each  street  to  be  12'  8"  and  one  12'  4"  in 
width,and  had  been  refused  a  permit,  lacking  which  he 
could  not  build  without  subjecting  himself  to  a  penalty. 
The  owner  brought  suit  for  mandamus  in  the  Superior 
Court  of  Baltimore  City,  in  January,  1890,  to  compel  the 
Appeal  Tax  Court  to  issue  a  permit  to  build  the  four  de- 


178   PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

sired  houses.  Mr.  Justice  Harlan  decided  in  favour  of 
the  plaintiff  on  constitutional  grounds,  claiming  that  one 
incident  of  the  ownership  of  property  is  that  the  owner 
can  use  it  as  he  sees  fit,  so  long  as  he  does  not  create  a 
nuisance,  and  such  a  regulation  would  deprive  him  to 
that  extent  of  the  right  of  property  without  compensa- 
tion. The  ordinance  was  passed  in  the  interest  of  the 
general  public,  because  it  was  deemed  desirable  that 
the  city  should  be  as  beautiful  as  possible  and  an  already 
beautiful  part  should  not  be  rendered  less  beautiful, 
which  would  be  the  case  if  these  narrow  houses  were 
erected.  Consequently  the  Appeal  Tax  Court,  which 
had  the  matter  in  charge,  would  not  issue  the  permit, 
as  the  plans  did  not  correspond  with  the  city  ordinance, 
holding  ^'that  the  four  buildings  proposed  to  be  erected 
as  described  in  the  application  and  the  plat  filed  by  the 
said  Wm.  H.  Hampson,  in  their  size,  general  character 
and  appearance  would  not  conform  to  the  general  char- 
acter of  the  buildings  in  the  locality  where  he  proposed 
to  erect  the  same,  and  their  erection  would  tend  to  de- 
preciate the  value  of  the  surrounding  improved  and 
unimproved  property."  Mr.  Justice  Harlan,  however, 
ordered  the  mandamus  and  compelled  the  Appeal  Tax 
Court  to  issue  the  permit,  the  question  having  been 
argued  before  the  court  on  constitutional  grounds,  and 
in  such  a  case  he  considered  that  it  would  deprive  the 
owner  of  the  right  of  property  without  compensation. 
In  view  of  the  regulations  which  we  have  long  had  in 
cities  regarding  the  use  of  private  property,  it  would 
seem  to  have  been  incumbent  upon  the  court  to  decide 
whether   this   particular   regulation   was   inconsistent 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      179 

with  the  right  of  private  property.  Now,  according  to 
the  author's  idea,  this  regulation  was  not  necessarily 
against  the  right  of  private  property,  because  this  right 
carries  with  it  a  social  side;  it  exists  for  social  purposes. 
But  it  appears  that  no  argument  was  made  in  favour 
of  this  position  although  doubtless  the  court  would  have 
been  glad  to  listen  to  an  argument  on  the  other  side, 
but  the  city  attorney  making  none,  and  the  only  argu- 
ment being  made  by  the  plaintiff's  attorney,  the  learned 
judge  naturally  gave  his  decision  in  accordance  with 
the  arguments  presented.  ^^ 

Surely  a  strong  argument  could  have  been  made,  for 
cities  from  time  immemorial  have  regulated  the  use  of 
property  to  a  great  extent,  and  in  foreign  cities  regula- 
tions may  be  found  similar  in  spirit  and  purpose  to  the 
ordinance  in  Baltimore.  But  without  going  to  foreign 
cities  we  have  regulative  ordinances  and  regulations  of 
a  sweeping  nature  in  our  own  land.  Consider,  for  ex- 
ample, New  York  City.  Here  we  find  a  condition  of 
things  which  is  described  in  the  Real  Estate  Record  and 
Guide,  SL  leading  real  estate  newspaper  of  the  city,  as 
follows : 

''The  building  law  authorizes  the  Superintendent  of 
Buildings  to  make  regulations  for  the  inspection  of 
passenger  elevators  and  for  the  construction  of  fire- 
escapes.  The  tenement  house  law  authorizes  the  Su- 
perintendent of  Buildings  to  make  regulations  for  light 
and  ventilation  and  for  plumbing  and  drainage.  ..." 

The  building  law  has  many  details,  and  some  are 
mentioned,  as  follows: 

"The  present  building  law  is  the  growth  of  the  past 


180    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

thirty-five  years.  .  .  .  Conceding  that  it  needs  some 
modifications,  our  building  law  stands  as  the  model 
law  of  the  great  cities  of  the  world." 

This  is  an  expression  of  the  opinion  of  real  estate 
owners  themselves.  Conservatism  in  change  was  urged 
by  the  Real  Estate  Record  and  Guide  and  the  tenement 
house  law  was  criticised  in  some  particulars,  but  on  the 
whole  it  was  said  to  be  a  model  law.  This  is  in  an  edi- 
torial in  the  issue  of  November  23,  1895  entitled  ''For 
a  revision  of  the  laws  relating  to  Buildings";  in  another 
article  on  "the  New  Tenement  House,"  a  multitude 
of  details  regarding  tenement  house  law  is  given.  This 
is  a  law  somewhat  distinct  from  the  general  building 
law.  According  to  this,  transoms  are  allowed  in  some 
instances,  ''providing  the  door-casings  and  jambs  are 
made  fire-proof  by  an  outer  covering  of  tin."  Air  shafts 
are  regulated.  Each  water-closet  must  have  an  open- 
ing to  the  outside  air;  the  floor  of  each  water-closet  must 
be  made  waterproof  with  asphalt,  cement,  tile,  metal 
or  some  other  material. ^^ 

We  have  here  regulations  quite  as  far-reaching  as 
those  provided  by  the  Baltimore  ordinance  which  was 
declared  unconstitutional;  although  the  New  York 
regulations  are  based  not  on  grounds  of  beauty  but  of 
health  and  morals.  But  aesthetic  considerations  as  en- 
titled to  decisive  weight  by  our  courts  are  merely  of 
slower  development,  and  in  the  cited  building  ordinance 
we  have  an  illustration  of  an  instance  in  which  the  right 
of  private  property  was  made  by  the  court  to  include 
more  than  it  need  include. 

In  this  connection  it  is  important  to  notice  that  the 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      181 

question  whether  public  purpose  might  embrace  things 
which  increase  ''the  picturesqueness  and  interest  of 
life"  was  decided  affirmatively  by  Mr.  Justice  Holmes 
in  the  case  of  Hubbard  v.  Taunton,  January  8,  1886. 
The  question  was  raised  by  a  petition  of  ten  taxable 
inhabitants  to  restrain  the  city  from  pajdng  two  hun- 
dred dollars  for  twelve  public  concerts.  The  amount 
involved  was  small,  but  the  principle  was  sustained  at 
this  comparatively  early  day,  and  thus  we  may  say 
that  sesthetic  considerations  in  general  were  permitted  to 
come  within  the  scope  of  public  purpose.  ^^ 

We  must  clearly  face  the  issue.  If  private  property 
is  a  social  trust,  then  it  has  been  objected  that  ''society 
may  abolish  the  trust."  That  is  true,  though  it  seems 
like  a  strange  doctrine  in  consideration  of  some  teach- 
ings that  we  hear  based  upon  the  theory  of  natural 
rights.  But  let  not  the  reader  accept  this  view  merely 
because  the  author  supports  it.  It  follows  necessarily 
from  the  nature  of  society.  Moreover,  the  conclusions 
upon  this  subject  reached  by  the  ablest  thinkers  in  va- 
rious professions  are  in  substantial  agreement,  and  as  it 
is  one  of  such  supreme  importance,  it  may  be  permissi- 
ble to  adduce  quotations  from  the  religious  teacher,  the 
ethical  teacher,  the  social  philosopher,  and  the  jurist. ^^ 

Suppose  we  begin  with  Moses.  Sometimes  when  it  is 
proposed  to  regulate  property,  Moses  is  quoted.  The 
law  of  Moses  says,  "Thou  shalt  not  steal,"  and  Moses 
ranks  as  one  of  the  greatest  legislators  in  the  world's 
history.  But  this  same  Moses  who  said,  "Thou  shalt 
not  steal"  also  laid  down  regulations  for  the  use  of  pri- 
vate property  which  go  a  great  deal  further  than  any 


182    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

laws  which  have  ever  been  passed  or  even  proposed 
seriously  in  any  American  legislature.  He  regulated 
private  property  to  an  extent  that  would  be  declared 
unconstitutional  in  the  United  States,  and  we  would 
have  to  change  our  State  and  national  Constitutions 
radically  to  make  possible  such  intensive  and  extensive 
regulations  of  private  property  as  those  provided  for  by 
the  Mosaic  legislation.  So  it  will  not  do  to  quote  "Thou 
shalt  not  steal"  against  those  who  urge  that  the  state 
should  regulate  the  use  of  property.^^ 

Let  us  take  the  expression  of  Dean  Fremantle,  of 
Ripon,  on  this  subject: 

"The  nation  is  the  most  complete  of  all  the  societies  of 
men  now  in  existence.  We  are  necessarily  pledged  to  it 
with  our  whole  existence  in  this  world,  for  it  has  the  power 
of  directing  and  even  resuming  all  our  possessions,  and  of 
life  and  death  of  our  own  persons."  ^° 

So  far  as  England  is  concerned  Dean  Fremantle  lays 
that  down  as  both  a  legal  and  an  ethical  principle.  It 
belongs  to  the  state  by  right  to  resume  all  possessions, 
should  this  be  for  the  public  good. 

We  quote  also  from  another  divine,  the  economist 
Rev.  W.  Cunningham,  D.  D.,  LL.  D.,  Archdeacon  of  the 
diocese  of  Ely,  Fellow  and  Lecturer  of  Trinity  College, 
Cambridge.  The  quotation  is  taken  from  a  little  leaflet 
called  The  Church's  Duty  in  Relation  to  the  Sacredness  of 
Property. ^'^  Speaking  of  the  sacredness  of  property,  he 
says  that  it  is  sacred  because  it  is  a  trust  from  God,  and 
we  must  not  interfere  with  the  trust  and  the  correspond- 
ing responsibility;  and  yet  he  recognises  the  state's  right 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     183 

to  regulate  and  even  confiscate  under  circumstances,  and 
says  further  (pp.  9-10) : 

"The  Christian  conception  of  the  sacredness  of  property 
enables  us  to  see  the  grounds  on  which  it  is  entitled  to  re- 
spect, and  the  aims  which  men  should  keep  before  them 
in  using  their  possessions.  I  think  it  helps  us  to  see,  too, 
the  grounds  on  which  it  may  be  rightly  taken  away.  The 
civil  power  is  ordained  by  God  for  the  punishment  of  evil- 
doers and  the  praise  of  them  that  do  well,  and  it  may  be  the 
duty  of  the  state  to  interfere  with  and  readjust  the  relations 
to  property, — in  God's  name.  The  private  man  must  recog- 
nise the  sacredness  of  life,  and  dare  not  kill,  whatever  wrong 
he  may  have  suffered;  but  the  state  may — in  God's  name — 
condemn  to  death.  Just  so,  the  private  individual  ought 
to  have  regard  to  the  sacredness  of  property,  however  poor 
he  may  be;  but  the  state  may  interfere  with  it  in  God's 
name;  and  interference  thus  made  will  not  be  dictated  by 
private  greed,  but  by  public  uses.  .  .  .  From  time  im- 
memorial, in  cases  of  gross  misuse,  the  state  has  stepped  in  to 
confiscate  property.  Possessions  used  for  seditious  or  crimi- 
nal purposes  are  rightly  regarded  as  forfeited.  Between  these 
extremes  of  interference  with  full  compensation,  and  of  con- 
fiscation pure  and  simple  there  may  be  many  grades." 

That  means,  as  Dr.  Cunningham  says,  that  man 
has  in  property  a  trust  from  God,  and  whatever  inter- 
feres with  the  trust  conferred  upon  him  interferes  with 
his  responsibility;  but  he  recognises,  nevertheless,  the 
right  of  the  state  to  regulate  and  even  confiscate  under 
certain  circumstances,  although  not  the  right  of  the 
individual  to  do  the  same.  He  recognises  a  higher 
right  on  the  part  of  the  state  above  that  of  the  indi- 
vidual. He  admits  also  both  the  right  of  the  state  to 
take  property  with  full  compensation,  and,  under  cer- 


184    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

tain  circumstances,  the  right  of  confiscation,  which, 
however,  is  not  allowed  by  the  Constitution  of  the  United 
States.  Two  special  points  are  made  by  Dr.  Cunning- 
ham in  this  leaflet.  First,  he  claims  that  not  the  amount 
of  property  will  determine  the  interference,  but  the 
kind  of  use  to  which  the  property  may  be  put;  second, 
that  in  any  interference  the  aim  should  be  to  carry  out 
God's  will  and  bring  about  a  worthier  use, — '"to  see 
that  the  divine  will  is  more  effectively  realised  among 
men." 

Next  we  may  cite  the  following  quotation  from  Dr. 
Thomas  C.  Hall,  now  Professor  in  Union  Theological 
Seminary,  New  York  City: 

"the  divine  rights  of  kings  and  property 

''To  open  the  sermons  of  the  orthodox  divines  preached 
during  the  struggle  of  the  English  people  against  regal  tyr- 
anny is  to  enter  a  region  of  thought  well-nigh  impossible 
for  us  to-day.  The  divine  right  of  kings  to  misgovern  finds 
no  longer  a  place  in  English  thinking.  It  is  perfectly  well 
understood  that  rulers  and  governors  are  only  the  chief 
servants  of  the  community,  and  that  how  far  their  rule  is 
to  be  restricted  or  even  taken  from  them  altogether  is  purely 
a  matter  of  communal  expediency.  We  have  not  lost  sight 
of  the  fact  that  government  is  divine,  that  laws  are  eternal, 
and  that  the  enforcement  of  even  imperfect  enactments 
of  law  is  mercy.  Yet  we  are  realizing  more  and  more  that 
the  instruments  of  government  are  not  government,  that 
the  enactments  of  law  are  not  law,  that  individual  interests 
are  not  the  whole  of  life,  and  that  the  highest  individualism 
can  reach  its  fruitful  development  only  in  the  highest  devel- 
opment of  communal  relationships. 

''  In  a  few  years  there  is  little  doubt,  thoughtful  men  will 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     185 

be  looking  back  with  amazement  upon  a  literature  that  deals 
with  the  divine  rights  of  property  in  much  the  same  spirit 
that  orthodox  preachers  dealt  with  the  divine  rights  of  kings 
in  the  day  of  King  Charles.  There  are  divine  rights  of  govern- 
ment and  of  property,  but  these  divine  rights  are  not  individ- 
ual possessions.  Property  of  any  kind,  whether  in  land  or 
in  the  products  of  the  land,  can  only  be  held  by  individuals 
in  so  far  as  its  holding  does  not  interfere  with  the  higher 
claims  of  the  communal  life.  Only  because  thrift,  ambition, 
caution  and  industry  are  individual  virtues  necessary  to  the 
conserving  of  the  communal  life  and  because  these  are  en- 
couraged by  the  protecting  of  property  by  the  community, 
is  it  a  matter  of  communal  expediency  that  there  should  be 
carefully  guarded  individual  usufruct  in  property  of  all 
kinds.  It  is,  however,  being  constantly  borne  in  mind  that 
the  community  has  never  surrendered  its  claim  whenever  a 
still  higher  expediency  demands  the  surrender  of  property 
to  the  communal  best  interest.  This  is  acknowledged  in 
the  right  of  eminent  domain,  in  the  right  to  tax  and  in  the 
right  of  condemnation  wherever  public  health  or  public 
safety  demands  such  condemnation,  and  the  matter  of  pos- 
session is  no  waiver  of  this  ultimate  right  of  that  higher 
expediency  that  would  reward  industry  and  thrift."  ^^ 

Turning  now  from  the  religious  teacher  to  an  ethical 
philosopher,  we  quote  from  the  late  Professor  Fried- 
rich  Paulsen,  of  the  University  of  Berlin,  a  "conserva- 
tive writer  on  ethics",  who  says: 

"If  it  is  true  that  expediency  supports  us  in  our  private 
property,  if  it  is  true  that  we  hold  it  by  the  consent  of  society, 
as  a  trust  for  the  race,  the  same  expediency  may  finally  de- 
mand that  we  surrender  it,  the  same  society  may  withdraw 
its  consent  and  ask  that  the  trust  be  used  otherwise."  ^^ 

And  from  Locke  we  have  a  quotation, — 'the  opinion 
of  a  great  philosopher,  and  one  who  especially  had 


186    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

great  weight  with  the  fathers  of  the  United  States,  the 
framers  of  our  Constitution.    Locke  says: 

"In  governments,  the  laws  regulate  the  right  of  property, 
and  the  possession  of  land  is  determined  by  positive  con- 
stitution." 24 

From  Benjamin  Franklin  we  have  the  following 
quotation : 

"Suppose  one  of  our  Indian  Nations  should  now  agree 
to  form  a  civil  Society;  each  Individual  would  bring  into 
the  Stock  of  the  Society  little  more  Property  than  his  Gun 
and  his  Blanket,  for  at  present  he  has  no  other.  We  know, 
that,  when  one  of  them  has  attempted  to  keep  a  few  Swine, 
he  has  not  been  able  to  maintain  a  property  in  them,  his 
neighbors  thinking  they  have  a  Right  to  kill  and  eat  them 
whenever  they  want  Provision,  it  being  one  of  their  Maxims 
that  hunting  is  free  for  all;  the  accumulation  therefore  of 
Property  in  such  a  society,  and  its  Security  to  Individuals 
in  every  Society,  must  be  an  Effect  of  the  Protection  af- 
forded to  it  by  the  joint  Strength  of  the  Society,  in  the  Exe- 
cution of  its  Laws.  Private  Property  therefore  is  a  Creature 
of  Society,  and  is  subject  to  the  Calls  of  that  Society,  when- 
ever its  Necessities  shall  require  it,  even  to  its  last  Farthing."^^ 

Now  let  us  take  the  views  of  economists.  Here  is  a 
quotation  from  a  conservative  writer  on  economics  of 
a  past  generation.  Thomas  Cooper,  Professor  in  the 
University  at  Columbia,  South  Carolina,  published 
a  work  on  Political  Economy  in  1829  (second  edition) 
from  which  we  take  the  following: 

"All  rights  are  creatures  of  society,  founded  on  their  real 
or  supposed  utility,  and  requiring  the  force  of  society  to 
protect  them.  All  duties  and  obligations  arise  from  our 
obligations  to  each  other."    Chap.  Ill,  p.  63. 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     187 

"  But  whatever  be  the  existing  regulations  concerning  prop- 
erty, particularly  landed  property,  in  any  country,  they  are 
the  mere  creatures  of  society,  from  which  alone  they  can 
derive  protection  and  security.  ...  In  a  state  of  society 
rights  are  conceded  because  they  are  found  or  presumed 
to  be  necessary  or  conducive  to  the  well-being  of  society; 
they  are  protected  by  the  force  of  the  community,  and  they 
may  be  abrogated  whenever  it  can  be  shown  that  they  have 
an  opposite  tendency"  (p.  66). 

"The  right  of  making  a  will  is  founded  entirely  on  the 
permission  of  the  law;  and  is  meant  as  a  stimulus  to  industry, 
and  a  fruitful  source  of  production  and  accumulation  that 
would  never  take  place  without  it"  (p.  67). 

Professor  Bastable,  of  Trinity  College,  Dublin,  says 
of  the  state: 

"It  is  entitled  to  claim  all  the  services  and  property  of  its 
subjects  for  the  accomplishment  of  whatever  aim  it  pre- 
scribes to  itself.  When  stated  in  so  rigid  a  form,  the  proposi- 
tion is  likely  to  awaken  dissent,  and  yet  from  the  strictly 
legal  and  administrative  point  of  view,  it  is  a  commonplace 
since  the  time  of  Austin.  "^^ 

Bastable  refers  to  Austin's  Province  of  Jurisprudence 
Determined;  Hobbes's  Leviathan,  Chap.  18;  and  Bodin's 
De  Repuhlica,  Book  I,  Chap.  7.  There  are  undoubt- 
edly actual  obstacles  and  limitations  to  regulation,  and 
Bastable  says  that  these  actual  limits  are  found  in  obsta- 
cles set  by  external  nature  and  by  sentiments  of  the 
subjects.  We  may  add  also  by  the  nature  of  political 
organisation, — especially  the  constitutionalism  of  the 
United  States  of  America. 

In  his  Studies  in  Economics,  Professor  Smart  says, 
"The  stewardship  of  wealth  is  not  ethical  only;  it  is 


188    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

political."  "  And  he  makes  an  argument  in  which  he 
mentions  the  national  debt,  based  on  the  security  of 
future  taxation,  taxation  being  based  on  private  rev- 
enue. 

Professor  H.  von  Scheel  says,  that  it  cannot  be  ob- 
jected that  the  legal  theory  of  private  property  is  absurd 
because  it  makes  it  possible  for  the  state  to  abolish 
private  property,  inasmuch  as  there  is  no  doubt  but 
that  it  is  within  the  province  and  power  of  the  state  to 
aboUsh  private  property.  This  is  possible,  although  we 
cannot  at  the  present  time  conceive  it  as  something 
which  is  desirable.  He  fully  concedes  that  it  is  the  com- 
plete and  ethical  right  of  the  state  to  do  whatever  it  will 
with  property,  in  the  public  interest. 

Professor  Wagner  says  of  private  property,  that  it  is 
an  historical,  relative  and  legal  concept, — a  concept 
which  has  grown  up  in  law  in  past  times,  and  one  which 
is  relative  and  variable,  involving  certain  rights  of  con- 
trol and  exclusion,  and  that  these  rights  are  not  un- 
alterable but  are  subject  to  change. 

Professor  E.  de  Laveleye,  in  his  work  on  Luxury} 
part  entitled  ''Laws  and  Morals  in  Political  Economy, " 
p.  159,  says: 

"It  is  economic  utility  which  is  the  true  basis  of  property, 
and  this  it  is  which  determines  what  shall  be  its  privileges, 
obligations  and  limits." 

Noteworthy  is  the  following  recognition  of  the  idea 
of  property  as  a  public  trust,  in  Hadley's  Economics. 
He  speaks  about  the  man  who  gambles  away  his  money 
as  violating  a  public  trust,  and  says: 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      189 

"The  man  who  gambles  away  his  money  is  not  simply 
parting  with  his  enjoyment,  but  with  his  control  of  the  in- 
dustrial forces  of  the  community.  It  is  not  like  selling  his 
labor,  it  is  like  selling  his  vote."  ^^ 

We  will  now  take  some  legal  opinions.  The  English 
jurist,  Lord  Bramwell,  in  an  article  in  the  Nineteenth 
Century,  says: 

"Private  property  ought  to  exist,  if  for  the  good  of  the 
community,  in  such  things,  and  to  such  extent,  as  would 
be  for  the  good  of  the  community;  ...  if  it  could  be  shown 
that  existence  of  private  property  was  not  for  the  good  of 
the  community,  the  institution  ought  to  be  abolished."  ^^ 

We  have  the  following  also  from  ''The  Laws  of  Prop- 
erty" by  Lord  Coleridge,  in  Macmillan's  Magazine, 
April,  1888: 

"The  right  of  property,  as  Mr.  Austin  has  shown,  has 
never  existed,  even  in  its  most  absolute  form,  without  some 
restriction. 

"The  object  of  the  restrictions  placed  in  England  for 
many  centuries  upon  powers  of  settlement  and  devise  is  inva- 
riably stated  to  have  been  to  prevent  mischievous  accumula- 
tion of  property  in  few  hands. 

"That  fifty  or  a  hundred  gentlemen,  or  a  thousand,  would 
have  a  right,  by  agreeing  to  shut  the  coal  mines,  to  stop  the 
manufactures  of  Great  Britain  and  to  paralyze  her  commerce, 
seems  to  me,  I  must  frankly  say,  unspeakably  absurd." 

In  a  decision  of  the  Supreme  Court  of  North  Caro- 
lina we  find  a  noteworthy  opinion : 

"Is  there  any  reason  why  the  state  shall  be  denied  the 
power  to  tax  a  succession,  whether  it  be  by  the  gift  inter 
vivos,  or  by  the  will  or  intestacy?  Property  itself,  as  well 
as  the  succession  to  it,  is  the  creature  of  positive  law.    The  legis- 


190    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

lative  power  declares  what  objects  in  nature  may  he  held  as 
property;  it  provides  by  what  forms  and  on  what  conditions 
it  may  be  transmitted  from  one  person  to  another.  The  right 
to  give  or  take  property  is  not  one  of  those  natural,  inalien- 
able rights  which  are  supposed  to  precede  government,  and 
which  no  government  can  rightfully  impair.  There  was  a 
time  when  at  least  as  to  gift  by  will  it  did  not  exist;  and  there 
may  be  a  time  when  it  will  seem  wise  and  expedient  to  deny 
it."  30 

The  following  quotation  ^^ — and  the  last  to  be  given — 
is  from  Huxley, — the  opinion  of  a  natural  scientist  who 
thought  a  great  deal  on  national  problems. 

"At  present  the  state  protects  men  in  the  possession  and 
enjoyment  of  their  property,  and  defines  what  that  property 
is.  The  justification  for  its  so  doing  is  that  its  action  pro- 
motes the  good  of  the  people.  If  it  can  be  clearly  proved 
that  the  abolition  of  property  would  tend  still  more  to  pro- 
mote the  good  of  the  people,  the  state  will  have  the  same 
justification  for  abolishing  property  that  it  now  has  for  main- 
taining it."  3^ 


Notes  and  References  to  Chapter  VI 

1  P.  166.  It  has  been  stated  that  a  remnant  of  the  feudal  idea 
can  be  seen  in  our  vast  public  domain.  The  state  "owned"  the 
land,  and  actually  gave  title  to  it;  for  example,  the  deeds  of  Ohio 
or  of  Wisconsin  go  back  to  the  United  States  government  and  the 
Northwest  Territory,  just  as  deeds  in  England  go  back  to  some  royal 
patent  or  grant  or  charter,  the  theory  being  that  the  state,  while 
owner  of  the  title,  is  only  a  trustee  for  the  people — is  agent  of  the 
people — and  disposes  of  the  public  domain  as  the  people  may  decide. 
In  our  earlier  history  they  frequently  decided  unwisely,  it  seems  now. 
For  example,  Ohio  practically  gave  away  all  her  school  lands.  Yet, 
nevertheless,  the  case  is  not  quite  so  clear  as  some  of  the  critics  of 
America  would  have  us  think.  The  need  of  settlement  was  felt  to 
be  urgent,  for  additional  settlers  brought  many  advantages  to  those 
already  in  the  new  States,  and  cheap  lands  were  the  inducement 
held  out  to  draw  settlers.  Moreover,  the  right  of  taxation  was  re- 
served. The  lands  of  the  University  of  Wisconsin  were  sold  "for  a 
song",  but  the  State  recognises  the  claim  of  the  University  in  ap- 
propriations which  would  equal  the  rent  on  a  large  domain.  A 
more  extended  treatment  of  this  topic  belongs  elsewhere. 

2  P.  168.  The  details  are  given  in  an  unpublished  paper  by  Pro- 
fessor All}^!  A.  Young,  entitled  "The  Administration  of  Public 
Lands  by  American  States  with  Special  Reference  to  Constitutional 
and  Legislative  Provisions  Delaying  the  Conversion  of  Public  Prop- 
erty in  Land  to  Private  Property." 

'  P.  168.  The  city  of  Ulm,  Germany,  is  especially  interesting  in 
this  particular,  because  we  can  put  our  finger  precisely  on  the 
dates  when  the  one  policy  yielded  to  the  other. 

The  nineteenth  century,  up  to  the  close  of  the  eighties,  witnessed 
a  diminution  in  the  area  of  the  publicly  owned  land.  For  this  there 
appears  to  have  been  several  reasons.  It  is  stated  by  the  Mayor 
that  it  was  desired  to  increase  the  money  capital  of  the  city  {den 
Geldgrundstock  der  Gemeinde)  and  then  also  that  the  municipal  ad- 
ministration authorities  lost  a  due  appreciation  of  the  economic  and 
social  significance  of  a  well  thought  out  policy  of  landownership. 

191 


192    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

It  seems  to  the  writer  highly  probable  that  we  have  here  to  do  with 
one  of  the  evil  consequences  of  a  false  economic  philosophy,  namely, 
the  laissez  faire  policy,  which  spread  from  France  and  England 
throughout  the  world.  It  was  not  until  the  practical  consequences 
of  this  philosophy  were  beginning  to  be  overcome  by  another  ec- 
onomic philosophy  that  Uhn  began  again  to  increase  the  area  of 
municipally  owned  land,  which  decreased  during  the  nineteenth 
century  until  about  1890.  In  1837  the  city  sold  two  tracts  (the 
bleaching  grounds,  the  obere  Bleiche  and  the  untere  Bleiche)  com- 
prising 104  Tagwerke,  for  40,000  florins,  equivalent  to  68,000 
marks,  and  in  1892  these  same  grounds  were  repurchased  at  a  cost 
of  435,000  marks, — an  experience  like  that  which  the  University 
of  Wisconsin  has  had,  only  there  the  difference  was  in  some  cases, 
as  nearly  as  the  writer  recollects,  as  one  to  one  hundred,  instead 
of  a  ratio  of  one  to  not  quite  six  and  a  half.  In  spite  of  sales,  in 
pursuance  of  its  social  and  economic  pohcies,  the  land  owned  by 
the  city  has  constantly  increased  since  that  time.  The  number 
of  hectares  bought  from  1891  to  1909  amounts  to  489J^,  approxi- 
mately, and  the  number  of  hectares  sold,  to  nearly  164,  giving  a 
gain  in  land  of  about  325^  hectares.  But  the  land  sold  has  brought 
the  city  over  a  million  marks  more  than  all  the  lands  purchased, 
so  this  land,  as  well  as  the  million  marks,  is  profit,  and  yet  only 
the  minor  part  of  the  gain  to  the  city,  the  greater  part  consisting 
in  improved  dwellings  and  in  an  increased  number  of  home  owners. 
See  article  by  the  writer  on  "Ulm  on  the  Danube.  A  Study  in 
Municipal  Land  Policy  and  Its  Provision  for  Workingmen's  Homes." 
Survey,  December  6,  1913. 

Belgium  has  had  a  similar  experience.  In  the  first  half  of  the 
nineteenth  century  the  local  political  units  or  parishes  were  encour- 
aged by  the  central  government  to  sell  even  recklessly  the  land  they 
owned,  and  now  they  look  longingly  upon  this  land,  which  has  in- 
creased greatly  in  value.  The  central  government  has  reversed  its 
policy  and  has  made  it  difficult  for  these  same  local  sub-divisions 
to  sell  land,  and  sales  have  practically  ceased. 

*  P.  168.  See  Adam  Smith,  Wealth  of  Nations,  Bk.  V,  Chap.  II, 
Pt.  I;  Cannan  ed..  Vol.  II,  pp.  307-309. 

*  P.  169.  But  there  is  reason  to  think  that  New  Zealand  has  at- 
tempted to  depart  too  far  from  private  property  in  land,  for  it  has 
not  so  far  proved  practicable  to  substitute  true  leases  for  property. 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     193 

The  public  leases  are  being  changed  in  such  a  way  as  to  make  them 
resemble  fee  simple  titles.  Cf.  on  this  subject  Le  Rossignol's  State 
Socialism  in  New  Zealand,  Chaps.  II  and  III.  This  subject  is  re- 
served for  more  extended  treatment  in  the  author's  Landed  Prop- 
erty and  the  Rent  of  Land.  Here  it  is  adduced  merely  for  illustrative 
purposes. 

*P.  171.  This  is  the  position  taken  by  the  Supreme  Court  of 
the  United  States  with  respect  to  patents.  In  a  recent  decision 
the  following  words  were  used  by  Mr.  Justice  Hughes : 

"But  whatever  rights  the  patentee  may  enjoy  are  derived  from 
statutory  grant  mider  the  authority  conferred  by  the  Constitution. 
This  grant  is  based  upon  public  considerations.  The  purpose  of 
the  patent  law  is  to  stimulate  invention  by  protecting  inventors 
for  a  fixed  time  in  the  advantages  that  may  be  derived  from  exclu- 
sive manufacture,  use  and  sale.  As  was  said  by  (deriving)  Chief 
Justice  Marshall  in  Grant  v.  Raymond,  6  Pet.  220  (1832),  pp.  241- 
243:  'It  is  the  reward  stipulated  for  the  advantages  derived  by  the  public 
from  the  exertions  of  the  individual,  and  is  intended  as  a  stimulus  to 
those  exertions  (italics  not  in  the  original).  .  .  .  The  public  yields 
nothing  which  it  has  not  agreed  to  yield;  it  receives  all  which  it 
has  contracted  to  receive.  The  full  benefit  of  the  discovery,  after 
its  enjoyment  by  the  discoverer  for  fourteen  years,  is  preserved; 
and  for  his  exclusive  enjoyment  of  it  during  that  time  the  public 
faith  is  pledged.  .  .  .  The  great  object  and  intention  of  the  act 
is  to  secure  to  the  public  the  advantages  to  be  derived  from  the 
discoveries  of  individuals,  and  the  means  it  employs  are  the  com- 
pensation made  to  those  individuals  for  the  time  and  labor  devoted 
to  these  discoveries,  of  the  exclusive  right  to  make,  use  and  sell  the 
things  discovered  for  a  hmited  time.'"  Dr.  Miles  Medical  Com- 
pany V.  John  D.  Park  &  Sons  Company,  220  U.  S.  373  (1911),  at 
p.  401. 

^  P.  172.  This  is  clearly  stated  by  Chief  Justice  Lemuel  Shaw: 
"  All  property  is  acquired  and  held  under  the  tacit  condition  that  it 
shall  not  be  so  used  as  to  injure  the  equal  rights  of  others,  or  to  de- 
stroy or  greatly  impair  the  public  rights  and  interests  of  the  com- 
munity; under  the  maxim  of  the  common  law,  Sic  utere  tuo  ut 
alienum  non  loedasJ'  Commonwealth  v.  Tewksbury,  11  Metcalf 
(Mass.),  55  (1846),  at  p.  57. 

In  the  case  of  People's  Gas  Co.  v.  Tyner,  131  Ind.  277  (1891),  at 


194    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

p.  281,  it  was  held  that  "  The  rule  that  the  owner  has  the  right  to  do 
as  he  pleases  with  or  upon  his  own  property  is  subject  to  many 
limitations  and  restrictions,  one  of  which  is  that  he  must  have  due 
regard  for  the  rights  of  others."  It  is  settled  that  the  owner  of  a 
lot  may  not  erect  and  maintain  a  nuisance  thereon  whereby  his 
neighbours  are  injured. 

8  P.  173.  For  example.  Professor  Dr.  Paul  Oertmann  of  Erlangen 
on  "  Enteignungsrecht "  at  Bundestag  der  Deutschen  Bodenreformer 
in  Dresden,  June  7,  1911;  in  Jahrbuch  der  Bodenreform  7ter  Bd. 
Zweites  Heft,  July,  1911;  also  the  following  report  of  a  Bavarian 
coramission,  advocating  extension  of  the  right  of  eminent  domain 
as  a  necessary  step  in  improvement  of  dwellings:  Enteignungsrecht, 
Ortsstrassenrecht  und  Wohnungsreform  in  Bayern.  Schriften  des 
Bayer,  Landesvereins  zur  Forderung  des  Wohnungswesens  (E.  V.) 
Heft  4,  1911. 

The  United  States  Supreme  Court  has  defined  eminent  domain 
as  follows:  "The  ultimate  right  of  the  sovereign  power  to  appro- 
priate, not  only  the  public  property,  but  the  private  property  of  all 
citizens  within  the  territorial  sovereignty,  to  public  purposes." 
Charles  River  Bridge  v.  Warren  Bridge,  11  Peters,  420  (1837). 

The  essential  hmitation  is  found  in  the  fact  that  it  must  be  for 
a  pubUc  purpose,  and  this  is  to  be  defined  in  the  first  instance  by  the 
legislature.  The  only  restriction  on  the  government  is  that  it  must 
compensate  the  owner  for  the  taking  and  it  must  not  be  unreason- 
able and  arbitrary.  See  the  following  cases:  Bonaparte  v.  Camden 
&  A.  R.  Co.,  3  Fed.  Cas.  No.  1617  (N.  J.  1830);  Raleigh  &  G.  Ry. 
Co.  V.  Davis,  19  N.  C.  451  (1837);  Garrison  v.  City  of  New  York, 
21  Wall.  196  (1874);  Lance's  Appeal,  55  Pa.  St.  16  (1867);  Lamb  v. 
Schottler  et  ah,  54  Calif.  319  (1880). 

"P.  173.  Holmes,  The  Common  Law  (Boston,  1881),  p.  43;  cf. 
p.  48,  last  paragraph. 

1"  P.  174.  Here  the  author  has  in  mind  a  concrete  case  in  the  Cat- 
skill  Mountains. 

"  P.  174.  The  following  cases  illustrate  this  point:  Kollock  v. 
City  of  Stevens  Point,  37  Wis.  348  (1875);  Lynde  v.  Rockland, 
66  Me.  309  (1876);  Spring  v.  Hyde  Park,  137  Mass.  554  (1884); 
Train  v.  Boston  Disinfecting  Co.,  144  Mass.  523  (1887);  Whidden 
V.  Cheever,  69  N.  H.  142  (1897);  Schmidt  v.  Muscatine  County, 
1201a.  267  (1903). 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     195 

12  P.  175.  See  U.  S.  v.  Jackson,  4  Cranch  C.  C.  483  (1834) ;  U.  S.  v. 
McDuell,  5  Cranch  C.  C.  391  (1838);  Waters  v.  People,  23  Colo.  33 
(1896);  McKinne  v.  Ga.,  81  Ga.  164  (1888);  State  v.  Bosworth, 
54  Conn.  1  (1886) ;  People  ex.  rel.  Walker  v.  Special  Sessions,  4  Hun. 
(N.  Y.),  441  (1875);  State  Horse  Cases,  15  Abbot's  Prac.  Rep.  N.  S. 
(N.  Y.)  51  (1873) ;  State  v.  Pugh,  15  Mo.  509  (1852). 

15  P.  175.  See  cases  on  Police  Power,  Appendix  IV,  p.  873,  for 
restriction  on  selling  liquor  and  opium,  also  prohibiting  gambling. 

!■*  P.  176.  While  others  before  von  Ihering  have  held  this  view 
it  is  of  special  significance  that  the  thought  should  find  this  beauti- 
ful expression  in  the  words  of  a  jurist.    It  is  as  follows : 

"Es  ist  also  nicht  wahr,  dass  das  Eigentum  seiner  'Idee'  nach 
die  absolute  Verfugungsgewalt  in  sich  schlosse.  Ein  Eigentum 
in  solcher  Gestalt  kann  die  Gesellschaft  nicht  dulden,  und  hat  sie 
nie  geduldet — die '  Idee '  des  Eigentums  kann  nichts  mit  sich  bringen, 
was  mit  der  'Idee  der  Gesellschaft'  in  V/iderspruch  steht."  Der 
Zweck  im  Recht  (3d  ed.).  Vol.  I,  p.  523. 

15  P.  179.  This  is  the  case  of  Hampson  v.  Appeal  Tax  Court.  For 
many  details  in  regard  to  it  the  author  is  indebted  to  Mr.  Justice 
Harlan,  from  whose  communication  of  November  18,  1912,  the 
following  is  given. 

"On  demurrer  I  held  that  the  answer  was  insufficient  in  law;  that 
the  ordinance  giving  the  Appeal  Tax  Court  the  power  sought  to  be 
conferred  was  invalid  on  constitutional  grounds;  that  it  conferred 
upon  an  administrative  board  power  to  deprive  one  of  the  beneficial 
uses  of  his  property  by  arbitrary  and  uncontrolled  action,  not  based 
upon  reasons  of  public  safety,  public  health,  public  morals,  public 
convenience  or  any  other  recognized  ground  for  interfering  with 
property  rights  under  the  police  power;  and  that  this  would  not  be 
due  process  of  law,  without  which  one  cannot  be  deprived  of  life, 
liberty,  or  property.  The  opinion  was  oral,  and  the  case  is  not  re- 
ported, but  the  papers  can  be  found  in  the  Clerk's  Office  of  the 
Superior  Court  of  Baltimore  City,  and  the  case  is  No.  48  of  the  cases 
instituted  in  1890.  No  appeal  was  taken,  but  twelve  years  after, 
in  1912,  the  ordinance,  the  terms  of  which  I  have  quoted,  was 
brought  before  the  Court  of  Appeals  in  Bostick  v.  Sams,  95  Md.  400 
(1902)  .  .  .  where  it  had  been  invoked  by  the  Judges  of  the  Appeal 
Tax  Court  to  justify  their  refusal  to  allow  a  'Zoo'  to  be  erected 
on  the  north  east  corner  of  Maryland  and  Mount  Royal  Avenues, 


196    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  the  Court  of  Appeals  held  that  a  citizen  has  a  common  law  right 
to  build  upon  his  land  in  such  manner  as  he  chooses  without  regard 
to  whether  his  building  will  conform  to  the  general  character  of  the 
buildings  in  that  locaUty;  that  this  right  cannot  be  abridged  by  a 
municipal  ordinance;  that  there  is  no  provision  in  the  charter  of 
Baltimore  City  which  authorizes  it  to  confer  upon  an  agency  like 
the  Appeal  Tax  Court  a  power  so  vague  and  undefined  in  its  scope 
and  so  arbitrary  in  its  character  as  that  contained  in  this  ordinance; 
that  the  charter  power  to  regulate  buildings  in  said  city  is  limited 
to  regulations  guarding  against  dangers  arising  from  unsafe  con- 
struction or  from  the  use  of  inflammable  materials,  or  some  similar 
exercise  of  the  police  power. 

"The  City  of  Baltimore  has  not  undertaken  to  make  any  definite 
regulations  as  to  the  width  of  houses.  Regulations  as  to  the  height 
of  houses  have  been  sustained  in  other  states  as  a  proper  exercise 
of  the  poHce  power,  and  in  the  case  of  Cochran  v.  Preston,  108  Md. 
220  (1908),  the  very  interesting  question  was  raised  as  to  whether 
the  height  of  buildings  in  a  definite  area  around  Mount  Vernon 
Place  could  be  limited  to  promote  a  purely  aesthetic  purpose.  It 
does  not  appear  in  the  report,  but  the  fact  was  that  the  Municipal 
Art  Society  had  had  prepared,  for  the  purpose  of  preserving  the 
beauty  of  Mount  Vernon  Place  and  preventing  the  Monument  from 
being  dwarfed  by  the  immediate  proximity  of  sky-scrapers,  an  act 
which  the  legislature  had  passed,  providing,  'that  from  and  after 
the  date  of  the  passage  of  this  Act,  no  building,  except  churches, 
shall  be  erected  or  altered  in  the  City  of  Baltimore  on  the  territory 
bounded  by  the  south  side  of  Madison  Street,  the  west  side  of  St. 
Paul  Street,  the  north  side  of  Center  Street,  and  the  east  side  of 
Cathedral  Street,  to  exceed  in  height  a  point  seventy  feet  above 
the  surface  of  the  street  at  the  base  line  of  Washington  Monument.' 
The  court  found  a  more  substantial  reason  for  the  enactment  of  the 
law  in  the  suggestion  of  counsel  for  the  appellees  that  the  purpose 
of  the  legislature  was  to  protect  the  handsome  buildings  and  their 
contents,  located  in  that  vicinity,  and  also  the  works  of  art  clustered 
there,  from  the  ravages  of  fire,  but  its  answer  to  the  suggestion  'that 
regulations  which  are  designed  only  to  enforce  upon  the  people  the 
legislative  conception  of  artistic  beauty  and  s^Tnmetry  will  not  be 
sustained,  however  much  regulations  may  be  needed  for  the  artis- 
tic education  of  the  people'  is,  'Such  is  undoubtedly  the  weight  of 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY     197 

authority,  though  it  may  be  that  in  the  development  of  a  higher 
civilization  the  culture  and  refinement  of  the  people  has  reached  the 
point  where  the  educational  value  of  the  Fine  Arts,  as  expressed  and 
embodied  in  architectural  symmetry  and  harmony  is  so  well  recog- 
nized as  to  give  sanction,  under  some  circumstances,  to  the  exercise 
of  this  power  even  for  such  purposes.' 

"I  think  I  should  make  the  same  ruling  today  as  I  did  in  the 
Hampson  case  on  an  ordinance  of  the  same  character,  but  there 
is  no  doubt  that  the  limits  of  the  police  power  have  been  and  prob- 
ably wisely,  extended  by  the  courts  in  late  years.  There  are  some 
notable  instances  in  the  Supreme  Court  of  the  United  States." 

1*  P.  180.  All  this  is  adduced  simply  by  way  of  concrete  illus- 
tration. Since  the  time  referred  to  the  tenement  house  laws  of 
New  York  have  become  more  stringent;  but  the  old  quotations 
used  years  ago  in  the  author's  lectures  are  kept,  for  they  are  as 
apt  as  if  they  appeared  yesterday.  This  fact  shows  the  continuity 
of  our  development. 

"  P.  181.  Hubbard  v.  Taunton,  140  Mass.  467  (188G),  at  p.  468. 

'8  P.  181.  Doubtless  for  the  scientific  reader  who  has  long  occupied 
himself  with  economic  discussions  these  quotations  may  not  be  re- 
quired, but  it  is  hoped  that  this  work  will  find  readers  among  those 
who  are  laymen  (so  far  as  economics  is  concerned)  as  well  as  by  spe- 
cialists in  economics. 

19  P.  182.  There  is  something  bearing  on  this  in  D.  G.  Ritchie's 
work  on  Natural  Rights.  Speaking  of  the  use  of  force  by  civilised 
nations  in  connection  with  the  conquest  of  barbarous  people,  he 
says: 

"We  cannot  call  such  conquests  'international  burglaries.'  The 
word  burglary  can  only  be  used  metaphorically  in  cases  where  there 
is  no  common  criminal  law  to  which  both  parties  are  subject,  and 
the  use  of  the  term  involves  a  naive  acceptance  of  the  status  quo, 
analogous  to  what  is  implied  in  calling  any  legislative  interference 
with  ancient  rights  of  property,  confiscation  or  theft."  Natural 
Rights,  p.  234. 

20  p.  182.  See  his  book  The  World  as  the  Subject  of  Redemption 
(1885),  p.  231. 

21  P.  182.  One  of  the  leaflets  published  for  a  time  by  the  Church 
Social  Union,  Series  A,  No.  2,  1895. 

22  P.  185.  Thomas  C.  Hall  in  The  Kingdom,  February  14,  1896. 


198     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

"  P.  185.  Quoted  by  W.  L.  Sheldon,  International  Journal  of 
Ethics,  for  October  1893,  Article,  "What  Justifies  Private  Prop- 
erty?" 

2^  P.  186.  Treatise  on  Civil  Government,  §  50. 

25  P.  186.  "Queries  and  Remarks  Respecting  Alterations  in  the 
Constitution  of  Pennsylvania,"  1778,  The  Writings  of  Benjamin 
Franklin  (ed.  by  Albert  Henry  Smyth,  10  Vols.,  N.  Y.  1905-1907), 
Vol.  X,  p.  59;  also  quoted  in  The  People,  New  York,  April  9, 
1893. 

»  P.  187.  Bastable,  Public  Finance,  Bk.  I,  Chap.  I,  p.  38.  The 
doctrine  of  the  supremacy  of  the  sovereign  power  in  the  matter  of 
property  is  traced  back  by  Mr.  Justice  Holmes  to  Baldus  in  the 
following  interesting  citation: 

"Some  doubts  have  been  expressed  as  to  the  source  of  the  immu- 
nity of  a  sovereign  power  from  suit  without  its  own  permission,  but 
the  answer  has  been  public  property  since  the  days  of  Hobbes 
{Leviathan  c.  26,  2).  A  sovereign  is  exempt  from  suit,  not  because 
of  any  formal  conception  or  obsolete  theory,  but  on  the  logical  and 
practical  ground  that  there  can  be  no  legal  right  as  against  the 
authority  that  makes  a  law  on  which  the  right  depends.  'Car  on 
peut  bien  recevoir  ley  d'autruy,  mais  il  est  impossible  par  nature  de 
se  donner  loy.'  Bodin,  Republique,  i.  c.  8.  Ed.  1629,  p.  132.  Sir 
John  Eliot,  De  Jure  Maiestatis,  c.  3.  Nemo  suo  statuto  ligatur  neces- 
sitative.  Baldus,  De  Leg.  et  Const.  Digna  Vox  (2d  ed.,  1496,  fol.  51b. 
Ed.  1539,  fol.  61)."  Kawananakoa  v.  Polybank,  205  U.  S.  349,  at 
p.  353  (1907). 

The  reference  should  read:  Baldus,  De  Leg.  et  Const.,  Digna  Vox 
2.     Edition  1496,  fol.  51  b.     Ed.  1539,  fol.  61. 

The  official  reporter  was  in  error  in  writing  second  edition,  as  if 
perchance  two  editions  had  appeared  in  1496!  Digna  Vox  refers  to 
a  particular  chapter  or  part  of  the  book,  and  2  is  a  subdivision  in 
Digna  Vox. 

Dean  John  H.  Wigmore  kindly  furnishes  the  following  full  refer- 
ence to  the  complete  edition  of  the  works  of  Baldus  (Venice,  1599), 
which  is  in  the  Law  Library  of  the  Northwestern  University,  Evans- 
ton,  Illinois,  the  title  being  taken  from  the  title  page  itself:  "Baldi 
Ubaldi  Perusini  jnrisconsulti  in  primum  secundum  et  tertium  Codicis 
libros  Commentarii,"  edited  by  Imolenus  and  B.  Celsus,  Lib.  I,  Tit. 
de  Legibus  et  Constitutionibus  Lex.  IV,  Digna  Vox.    The  separate 


THE  SOCIAL  THEORY  OF  PRIVATE  PROPERTY      199 

volumes  of  the  edition  do  not  have  volume  numbers.    The  quota- 
tion is  at  fol.  64. 

27  P.  188.  P.  295. 

28  P.  189.  P.  120. 

29  P.  1S9.  The  Nineteenth  Century,  Vol.  XXVII,  p.  449,  in  art. 
on  "Property." 

sop.  190.  The  case  is  Pullen  v.  Commissioners,  66  N.  C.  361 
(1872). 

31  P.  190.  T.  H.  Huxley,  in  "Administrative  Nihilism,"  an  ad- 
dress published  in  the  volume  Method  and  Results  (New  York,  1899). 

32  P.  190.  A  clear-cut  statement  of  the  essential  nature  of  all 
corporations  as  public  in  aim  is  given  in  a  case  cited  in  Haney's 
Business  Organization,  p.  87.  It  is  the  case  Mills  v.  Williams  (11 
Iredale  N.  C.  558),  where  the  court  says,  "The  purpose  in  making 
all  corporations  is  the  accomplishment  of  some  public  good."  This 
is  a  judicial  recognition  of  the  social  theory  of  corporate  property. 

Professor  Roscoe  Pound  has  written  an  admirable  article  entitled 
"The  End  of  Law  as  developed  in  Legal  Rules  and  Doctrines," 
Harvard  Law  Review,  Vol.  XXVII,  No.  3,  January  1914,  in  which 
he  shows  how  law,  passing  through  various  stages  in  its  evolution, 
has  now  entered  the  stage  of  "socialization";  and  this  means  the 
recognition  of  the  social  theory  of  property  and  contract.  This  arti- 
cle will  appear  in  his  forthcoming  and  eagerly  awaited  book.  Socio- 
logical Jurisprudence,  which  is  especially  recommended  as  collateral 
reading. 


CHAPTER  VII 

PROPERTY  AND  THE  POLICE   POWER 

The  peculiar  position  of  property  in  the  United 
States  has  often  been  made  the  subject  of  discussion 
and  the  criticism  of  this  position  has  been  favourable 
as  well  as  unfavourable;  some  regarding  the  constitu- 
tional safeguarding  of  property  in  our  country  as  a  bul- 
wark of  civilisation  and  others  looking  upon  the  shel- 
tered position  of  property  as  a  force  standing  in  the 
way  of  a  satisfactory  evolution  of  human  rights.^  But 
this  position  has  perhaps  never  been  fully  understood. 
It  is  a  matter  of  gradual  growth  and  is  closely  connected 
with  certain  rights,  which  form  indeed  a  large  and  com- 
plex bundle  of  rights,  called  in  American  jurisprudence, 
''the  Police  Power  ".  We  have  here  to  do  with  one  of 
the  most  remarkable  developments  in  the  history  of 
jurisprudence. 

Now  let  us  consider  the  circumstances  under  which 
this  growth,  only  very  partially  premeditated  and  fore- 
seen, has  taken  place.  At  the  time  of  the  formation 
of  the  National  or  Federal  Constitution  in  1789,  the 
States  comprising  the  Union  were  thirteen.  These 
States  yielded  rights  to  a  central  government  very 
reluctantly,  and  these  rights  were  enumerated,  making 
the  federal  government  one  of  carefully  enumerated 
powers,  while  the  separate  States  had  the  residumn  of 

200 


PROPERTY  AND  THE  POLICE  POWER  201 

sovereignty.  But  these  separate  States  had  already 
provided  themselves  with  written  Constitutions  or  at 
once  proceeded  to  do  so.  Having  originally  had  char- 
ters from  the  mother  country  they  liked  to  see  their 
rights  and  duties  expressed  precisely  and  definitely. 
But  it  was  especially  their  rights  which  they  thought  of, 
not  merely  because,  like  children,  colonies  generally 
think  more  of  rights  than  duties  to  the  conomon  mother, 
but  because  the  thinkers  of  the  eighteenth  century  on 
the  whole  paid  so  little  attention  to  social  duties  that 
the  concept  of  social  duty  itself  is  one  that  hardly  seems 
to  fit  into  its  social  philosophy. 

They  had  become  jealous  of  authority,  and  the  indi- 
vidualism of  the  latter  part  of  the  eighteenth  century 
contributed  to  this  sentiment.  The  individual's  rights 
must  find  expression  in  bills  of  rights,  based  on  English 
experience,  English  history  and  eighteenth  century 
social  philosophy,  and  these  bills  of  rights  became  parts 
of  written  Constitutions. 

We  begin  now  to  see  the  elaborate  character  of  the 
American  government.  The  people  gave  to  the  legisla- 
ture only  certain  powers  and  reserved  others — powers 
which  could  become  effective  only  through  changes 
in  Constitutions — and  this  gave  little  concern  at  a  time 
when  the  accepted  social  philosophy  favoured  negative 
rather  than  active  constructive  economic  policies.  While 
the  American  people  early  recognised  that  they  had 
before  them  governmental  tasks  of  a  positive  nature, 
these  were  largely  either  of  a  political  kind,  such  as  the 
extension  of  manhood  sufTrage  and  the  adjustments  of 
State  and  nation,  or  of  an  economic  kind  compatible 


202    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

with  that  dominant  individuahsm  which  prevailed  un- 
til the  latter  part  of  the  nineteenth  century.  And  then 
the  powers  granted  to  legislative  bodies  were  divided 
again  into  federal  powers  and  State  powers.  And  over 
this  complicated  mechanism  were  set  courts  as  umpires 
and  guardians,  the  supremacy  in  case  of  conflict  be- 
tween federal  courts  and  State  courts,  going  to  the  fed- 
eral or  central  courts. 

Now  the  liberal  and  even  the  radical  social  philosophy 
of  the  latter  part  of  the  eighteenth  century  emphasised 
the  property  of  the  individual  and  had  little  sense  of 
society,  and  perhaps  even  less  state-sense  or  state  self- 
consciousness.^  The  French  Constitutions  of  the  Revo- 
lutionary Period  proclaimed  and  emphasised  the  rights 
of  private  property  and  had  no  reference  to  wide- 
spread socialisation  of  property.  Both  land  and  capital 
were  conceived  of  even  by  the  radicals  of  the  day  as 
private  property.  This  is  seen  in  ''A  Declaration  of 
the  Rights  of  Man  and  of  the  Citizen,"  adopted  by 
the  National  Assembly  of  France,  Aug.  26,  1789  (Ar- 
ticle 17),  which  reads: 

"Since  property  is  an  inviolable  and  sacred  right,  no  one 
shall  be  deprived  thereof  except  where  pubhc  necessity, 
legally  determined,  shall  clearly  demand  it,  and  this  only 
on  condition  that  the  owner  shall  have  been  previously  and 
equitably  indemnified."  ^ 

Thomas  Paine's  writings,  regarded  as  extremely 
radical  in  his  day,  accepted  private  property  along  with 
his  advanced  ideas."*  Likewise  the  American  Bills  of 
Rights  and  Constitutions  framed  in  the  eighteenth 
century  and  all  those  framed  up  to  the  present  time 


PROPERTY  AND  THE  POLICE  POWER  203 

have  emphasised  private  property.  The  date  of  the 
Federal  Constitution,  as  already  stated,  was  1789,  but 
in  1791  ten  amendments  were  added,  commonly  called 
''The  Bill  of  Rights,"  of  which  the  fifth  includes  this 
clause: 

"  No  person  shall  be  .  .  .  deprived  of  life,  liberty  or  prop- 
erty, without  due  process  of  law;  nor  shall  private  property 
be  taken  for  public  use  without  just  compensation." 

This  restriction  limits  the  Congress  of  the  United  States, 
and  in  the  still  earlier  Constitution  of  Massachusetts 
(1779-80),  Article  I  reads  as  follows: 

"All  men  are  born  free  and  equal,  and  have  certain  natural, 
essential  and  unalienable  rights;  among  which  may  be  reck- 
oned the  right  of  enjoying  and  defending  their  lives  and  liber- 
ties; that  of  acquiring,  possessing  and  protecting  property;  in 
fine,  that  of  seeking  and  obtaining  their  safety  and  happi- 
ness." 

Such  provisions  are  found  generally  in  the  Constitutions 
of  the  separate  States.  But  one  other  provision  of  the 
Federal  Constitution  has  now  chief  force  in  determining 
the  position  of  property  in  the  United  States  and  that 
is  a  part  of  Article  XIV,  an  amendment  adopted  in 
1868  after  the  Civil  War.    It  reads  as  follows : 

"No  state  shall  make  or  enforce  any  law  which  shall  de- 
prive any  person  of  life,  liberty  or  property  without  due 
process  of  law;  nor  deny  to  any  person  within  its  jurisdiction 
the  equal  protection  of  the  laws." 

All  these  guarantees  of  rights  and  property  are  found 
in  Amendments  to  the  Constitution  and  not  in  the 
original  instrument,  which  was  political  rather  than 


204    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

economic  in  character,  but  the  original  Constitution 
contained  one  provision  of  vast  importance,  for  it  pro- 
hibited the  States  from  passing  any  "law  impairing  the 
obligation  of  contracts."  We  have  this  treatment  of 
fundamental  economic  rights  in  our  American  constitu- 
tional system,  and  as  a  contract  is  regarded  by  Amer- 
ican courts  as  a  property  right,  these  provisions  relate 
to  property.  The  Constitution  provides  also  guaran- 
tees of  vested  rights  or  interests  and  of  personal  free- 
dom, which,  with  property  and  contract,  make  up  the 
four  most  fundamental  economic  rights  of  modern 
society. 

But  what  is  in  the  Constitution  needs  interpretation 
and  this  has  been  given  in  judicial  decisions,  which  fill 
many  and  many  a  ponderous  tome.  Gray's  Cases  on 
Property  alone  fill  six  large  volumes  and  it  has  been 
stated  that  all  reported  cases  number  over  three  hun- 
dred and  fifty  thousand,  and  of  these  cases  those  bear- 
ing on  property  constitute  a  large  proportion.  For 
over  one  hundred  years  American  judges  have  been 
giving  meaning  to  property  and  one  of  the  things  which 
is  most  apparent  is  the  impossibility  of  maintaining  any 
hard  and  fast  concept  of  property.  Property  is  an  ex- 
clusive right.  ''Very  well,  then,"  says  the  owner  of  a 
farm,  "no  one  shall  pass  over  my  land" :  but  society  lays 
a  street  across  the  land  and  the  judges  must  justify  this 
and  must  so  interpret  property  as  to  make  this  act  con- 
sistent with  the  concept  property.  Society  establishes 
an  easement — a  right  to  traverse  the  land,  but  compels 
payment  of  damages  to  the  owner.  And  in  the  United 
States,  if  the  owner  of  the  land  receives  a  benefit  from 


PROPERTY  AND  THE  POLICE  POWER  205 

the  street,  he  must  pay  for  this  benefit  in  a  special  assess- 
ment, so  the  land  owner's  exclusive  right  is  violated  and 
he  frequently  has  to  pay  heavily  into  the  bargain  for  the 
violation  of  his  exclusive  claim.  The  proprietor's  right 
is  exclusive  to  his  beasts,  but  unless  he  makes  regular 
pajonents  to  society  for  its  various  purposes,  including 
the  education  of  other  men's  children,  his  horses  and 
cows  may  be  taken  from  him  and  sold  at  public  auction 
and  the  proceeds  used  for  the  general  good.  But  all 
this  time  the  Constitution  guarantees  rights  of  property 
and  all  the  resources  of  a  great  nation  are  available  for 
the  protection  of  property.  If  necessary  a  million  armed 
men  would  without  a  moment's  hesitation  be  put  into 
the  field  to  defend  the  rights  of  the  proprietor  and  a 
great  navy  stands  on  guard  for  the  same  purpose.  And 
no  Congress,  no  legislature  may  presume  to  violate  the 
rights  of  property.  Nor,  save  as  in  harmony  with  the 
written  Constitutions  and  in  consonance  with  the  judi- 
cial interpretation  of  these  Constitutions,  may  elected 
representatives  of  the  people  presume  to  define  prop- 
erty and  give  their  definition  binding  force. 

This  is  a  situation  which  is  unique  and  a  unique 
arrangement  has  come  into  being  to  meet  this  situation. 
Property,  private  and  individual,  is  permanent,  in- 
violate, sacred,  but  it  must  serve  social  interests  and 
the  welfare  of  society  must  come  first.  In  practice  the 
social  theory  of  property  holds  in  the  United  States  as 
well  as  elsewhere;  and  this  is  brought  about  by  the 
power  of  the  judge  to  declare  what  private  property 
carries  with  it,  and  what  it  does  not  carry  with  it;  and 
this  power  is  called  the  police  power:  the  centre  of 


206     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

socio-economic  conflict  in  the  United  States.  For  the 
economist  the  chief  element  in  the  police  power  is  its 
relation  to  property,  using  the  term  in  its  broad,  in- 
clusive sense. 

The  police  power  is  regarded  as  primarily  a  legislative 
power,  and  it  is  true  that  legislative  bodies  provide  in 
their  enactments  materials  for  the  work  of  the  courts. 
But  the  legislative  power  has  no  inherent  hmitations, 
and  as  in  all  lands,  so  in  the  United  States,  it  goes  with- 
out saying  that  legislatures  are  presumed  to  seek  the 
public  good  only.  What  is  peculiar  in  the  United  States 
is  that  controlling  influence  of  courts  given  them  by 
American  Constitutions  and  within  the  limits  of  these 
Constitutions;  this  peculiarity  has  given  rise  to  the 
modern  use  of  the  term  police  power.  As  a  peculiar 
institution,  the  police  power  is  essentially  judicial,  and 
it  is  as  a  judicial  power  that  it  requires  discussion  in  the 
present  connection;  and  from  this  point  of  view  we  may 
define  it  as  follows :  The  police  power  is  the  power  of  the 
courts  to  interpret  the  concept  property,  and  above  all  pri- 
vate property;  and  to  establish  its  metes  and  bounds.  The 
judges,  in  their  decisions  upon  the  accordance  of  legisla- 
tive acts  with  the  written  Constitutions,  tell  us  what  we 
may  do  with  property  or  what  acts  bearing  on  property 
are  allowable.  The  pohce  power  shapes  the  develop- 
ment of  the  social  side  of  property.  It  tells  us  what 
burdens  the  owner  of  property  must  bear  without  com- 
pensation. Now  notice  the  words  "without  compensa- 
tion" for  under  the  right  of  eminent  domain,  a  man's 
property  may  be  taken  for  whatever  is  deemed  a  public 
purpose,   but  with  compensation.     Thus  in  shaping 


PROPERTY  AND  THE  POLICE  POWER  207 

property  rights,  eminent  domain  while  actually  going 
yari  passu  with  the  police  power  logically  begins  where 
the  police  power  ceases.^  Many  efforts  have  been  made 
to  define  police  power,  but  the  present  author  ventures 
to  contend  that  from  the  economic  point  of  view,  so  far 
as  property  is  concerned,  it  is  essentially  the  poiver  to 
interpret  property  and  especially  private  property  and  to 
give  the  concept  a  content  at  each  particular  period  in  our 
development  which  fits  it  to  serve  the  general  welfare.  The 
police  power  means  the  general  welfare  theory  of  prop- 
erty. It  signifies  ''the  principle  of  public  policy"  with 
respect  to  property.^  This  idea  above  all  others  gives 
unity  to  the  concept  of  police  power. 

The  Encyclopaedia  Britannica  gives  no  article  on  police 
power,  but  in  the  Index  under  Police,  there  is  a  refer- 
ence to  the  United  States  and  in  an  article  by  Judge 
Simeon  E.  Baldwin  on  American  Law,  the  topic  ''Police 
Power  of  the  States"  is  found  in  the  margin  and  a  treat- 
ment comprising  two-thirds  of  one  column  is  given.  It 
is  often  said  that  this  is  a  development  peculiar  to  the 
United  States,  because  elsewhere,  and  particularly  in 
England,  parliamentary  bodies  decide  what  may  and 
may  not  be  done  and  this  continuously  gives  shape  to 
property  without  any  careful  and  prolonged  and  ex- 
haustive treatment  of  the  concept  property.  The  dif- 
ference between  the  American  method  and  the  English 
method  is  this:  Parliament  decides  what  is  to  be  done 
and  it  is  done,  regardless  of  its  effects  on  private  prop- 
erty. Parliament,  as  the  highest  court  in  the  land, 
combines  judicial  and  legislative  powers  ^  and  its  last 
utterance  is  the  utterance  of  sovereignty  and  it  may 


208     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

invade  the  essential  rights  of  property  as  the  idea  has 
been  understood  heretofore.  On  the  whole  private 
property  has  until  recently  been  as  well  protected  in 
England  as  it  has  been  anywhere,  and  this  has  been  due 
to  the  weight  of  property  in  the  councils  of  the  nation. 
Humanity  and  progress  have  secured  generous  recog- 
nition and  played  their  roles  in  England.  England  has 
been  a  pioneer  and  has  led  the  world  in  protective  labour 
legislation  and  in  some  ways  is  still  ahead  of  her  chief 
competitor  in  this  field,  namely,  Germany :  and  all  this 
has  been  consistent  with  the  position  of  property  in  Par- 
hament  which,  always  comprising  many  men  of  prop- 
erty, has  been  representative  of  the  wealth  of  England. 
But  the  non-propertied  classes  are  receiving  increasing 
recognition  in  Parliament  and  in  the  conflicts  of  Par- 
liament the  fate  of  private  property  in  its  infinite  de- 
tails must  be  settled  for  England. 

In  the  United  States  the  people  as  a  whole  have  re- 
served to  themselves  the  right  to  decide  upon  the  fate 
of  property  by  placing  it  in  their  fundamental  law  and 
this  fundamental  law  can  be  changed  only  very  de- 
liberately either  by  an  action  of  Congress,  and  this  re- 
quires two-thirds  of  both  houses  and  a  ratification  by 
three-fourths  of  the  States,  or  by  another  method  which 
requires  a  vote  of  a  similar  majority. 

It  has  frequently  been  said  that  the  Constitution  of 
the  United  States  has  become  practically  unamendable, 
but  two  important  amendments  have  recently  been 
made — one  rendering  a  federal  income  tax  constitu- 
tional— and  the  other  replacing  the  old  method  of  elect- 
ing senators  by  the  legislatures  of  the  States  by  the 


PROPERTY  AND  THE  POLICE  POWER  209 

method  of  popular  elections — ^both  amendments  of  a 
decidedly  progressive  character.  If  it  finally  appears 
that  after  all  the  method  of  amendment  is  faulty  be- 
cause too  slow  and  because  it  gives  a  minority  too  great 
power,  the  method  itself  may  be  changed  according 
to  the  general  constitutional  provisions  already  de- 
scribed. 

The  American  method  thus  leaves  to  a  body  of  ex- 
perts, the  best  and  most  highly  trained  and  most  highly 
specialised  known  to  the  United  States,  the  determina- 
tion of  property  and  the  other  fundamental  economic 
institutions  of  society.  If  it  is  proposed  to  introduce 
this,  that  or  the  other  social  reform,  affecting  as  do 
most  reforms  property  interests,  the  judges  decide 
whether  or  not  anything  in  the  proposed  measure  is  in 
real  conflict  with  the  essential  idea  of  property,  as  they 
deem  it  defined  in  the  Constitution  at  that  particular 
time.  If  it  is,  we  are  not  yet  at  the  end  of  our  resources, 
as  many  Americans  have  in  concrete  cases  seemed  to 
suppose,  for  we  still  have  the  right  to  take  property  and 
condemn  rights  and  privileges  under  the  right  of  emi- 
nent domain,  by  paying  just  compensation. 

The  method  followed  in  America  then  necessarily 
secures  the  development  both  of  the  individual  and 
social  sides  of  property  and  likewise  necessarily  renders 
the  idea  of  property  a  flexible  one,  adapted  to  the  actual 
situation.  It  is  manifestly  impossible,  or,  to  speak  more 
accurately,  in  the  course  of  actual  experience  it  is  dem- 
onstrated that  it  is  impossible,  to  make  payment  for 
all  burdens  imposed  on  property.  It  becomes  evident 
beyond  all  doubt  that  private  property  is  held  subject 


210     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  certain  burdens  imposed  in  the  general  interest — 
sometimes,  too,  rather  grievous  burdens.  The  require- 
ment that  fire  escapes  should  be  placed  on  buildings 
although  the  law  did  not  require  them  when  the  build- 
ings were  constructed,  serves  as  one  of  hundreds  of 
illustrations.  And  here  we  have  this  special  body  whose 
function  it  is  to  say  just  how  far  these  burdens  may  go 
without  compensation,  and  just  when  compensation  is 
called  for.  In  other  words,  we  have  as  a  consequence 
a  development  of  the  idea  of  vested  rights  which  corre- 
sponds to  ever  changing  conditions  of  time  and  place; 
for  the  police  power  may  vary  more  or  less  from  State 
to  State,  the  Supreme  Court  of  the  United  States  again 
setting  the  limits  of  variations  and  acting  as  umpire 
between  various  interests  and  various  economic  classes, 
the  haves  and  have-nots  included. 

The  people  in  America  are  thus  guarded  against  that 
excessive  development  of  vested  rights  which  the  late 
Thorold  Rogers  thought  already  taking  place  in  Eng- 
land and  which  apparently  filled  him  with  anxiety  for 
the  future.^ 

What  is  described  may  seem  a  mere  ideal.  And  it 
may  be  asked:  how  can  a  progressive  thinker  thus 
praise  that  excess  of  conservatism  in  the  United  States 
which  even  conservative  thinkers  have  felt  called  upon 
to  condemn,  while  warm-hearted  thinkers,  fired  with 
the  enthusiasm  of  humanity,  have  at  times  been  filled 
with  despair,  deploring  in  tears  the  apparently  insu- 
perable obstacles  standing  in  the  way  of  improvements 
like  workingmen's  insurance,  improved  dwellings  for 
the  poor,  the  aesthetic  development  of  cities;  property 


PROPERTY  AND  THE  POLICE  POWER  211 

rights,  again  and  again  and  again,  interposing  a  veto 
and  crying  a  halt? 

This  is  a  large  subject  and  only  one  or  two  sugges- 
tions are  possible  at  this  time  and  place. 

First,  let  us  consider  one  favourable  aspect  of  Amer- 
ican development  up  to  the  present  time.  The  United 
States  is  a  country  which  has  grown  from  a  handful  of 
colonists  to  a  population  of  something  like  one  hundred 
millions,  covering  a  continent  and  all  that  in  a  century 
and  a  quarter,  reckoning  from  the  adoption  of  the  Con- 
stitution. The  population  has  come  from  the  four 
quarters  of  the  earth,  lacking  common  tradition,  lack- 
ing even  a  common  language,  heterogeneous,  ill-assorted 
apparently,  many  with  wild  vague  ideas  of  liberty — 
all  to  be  welded  together  into  a  nation.  How  difficult 
the  problems  of  orderly,  safe  progress  are,  is  to  be  seen 
by  the  experience  of  other  parts  of  the  world — 'Say 
France,  where  common  traditions  developed  by  long 
history  and  the  unified  nationality  should  make  the 
task  far  easier.  But  especially  do  several  of  the  South 
American  Republics — -to  say  nothing  of  Mexico  and 
Central  America — reveal  something  of  the  task  set  the 
United  States.  But  in  the  United  States  with  ample 
acknowledgments  of  all  defects,  we  do  find  order,  we 
do  find  progress,  continuous,  uninterrupted  progress — 
an  advancement  in  numbers,  in  wealth,  in  education 
and,  with  all  its  crudities,  a  civilisation  growing  in  ap- 
preciation of  the  higher  goods  of  hfe.^  And  for  this,  it 
may  be  claimed,  no  one  factor  is  more  to  be  thanked 
than  American  judges. 

But  in  the  second  place,  we  have  had  many  evils,  not 


212    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

due  to  the  system  of  government,  courts  included,  but 
to  features  which  do  not  inhere  in  it  as  its  essential 
features. 

Our  courts  have  often  been  narrow  and  doctrinaire 
and  given  to  legal  scholasticism  which  sometimes  makes 
one  think  of  mediaeval  discussions  regarding  the  number 
of  angels  who  could  dance  on  the  point  of  a  needle.^" 
Corrupt  American  courts  have  rarely  been.  They  have 
had  a  one-sided  legal  training,  and  in  this  they  have 
been  very  English.  They  have  lacked  that  broad  train- 
ing in  economics,  political  science  and  sociology  which 
on  the  Continent  of  Europe  is  being  more  and  more  in- 
sisted on.  Our  courts,  for  example,  are  just  beginning 
to  appreciate  beauty — aesthetic  purpose — as  a  public 
purpose  which  private  property  must  subserve.  They 
allow  a  man's  property  to  be  cut  up  to  promote  traffic 
and  to  encourage  growth  in  numbers  and  they  permit 
heavy  burdens  in  special  assessment  to  be  laid  on  him 
to  cover  costs,  but  they  balk  at  building  regulations 
which  aim  at  harmonious  urban  development,  although 
the  latter  may  add  to  the  value  of  the  property  of  an 
entire  section.  They  have  a  very  feeble  development 
of  the  sense  of  social  solidarity,  when  it  comes  to  cer- 
tain restrictions  on  property — a  large  sense  when  it 
comes  to  other  restrictions.  A  man  may  build  and  shut 
off  light  from  his  neighbours,  he  may  often  put  a  build- 
ing on  his  property  which  injures  the  property  of  his 
neighbours,  a  building  quite  unsuitable  to  the  district 
in  which  it  is  placed,  and  his  neighbours  are  held  power- 
less. Sometimes  it  seems  that  American  property 
coupled  with  American  liberty  means  the  right  to  use 


PROPERTY  AND  THE  POLICE  POWER  213 

one's  own  to  injure  one's  neighbour  ad  libitum.  Yet 
on  other  occasions,  the  interests  of  the  coinnaunity  are 
considered  carefully  and  American  courts  in  special 
assessments  go  to  a  length  which  a  Dutchman  regards 
as  an  invasion  of  the  sacred  rights  of  property  and  con- 
siders impossible,  although  desirable,  in  Holland,  and 
which  the  Duke  of  Argyle  regarded  as  confiscation 
when  something  of  the  sort  was  proposed  under  the 
term  ' '  betterment  tax ' '  for  London.  And  when  it  comes 
to  natural  gas  we  find  American  courts  forbidding  the 
private  owner  to  waste  gas  which  comes  to  the  surface 
on  his  land,  because  thus  he  injures  the  property  of 
others,  inasmuch  as  the  supply  in  nature's  reservoirs 
is  limited  and  the  gas  flows  in  underground  channels 
from  one  surface  owner  to  another.  All  these  distinc- 
tions are  quite  arbitrary  so  far  as  the  nature  of  things 
is  concerned  and  they  do  not  find  any  sufficient  justi- 
fication in  ancient  custom. 

But  the  remedies  are  obvious.  First,  we  need  an 
adequate  modern  legal  education  conceived  not  from 
the  point  of  view  of  private  practice,  but  from  the  point 
of  view  of  public  interests.  We  want  schools  of  juris- 
prudence in  the  broadest  sense.  And  then  as  judges, 
all  disclaimers  to  the  contrary  notwithstanding,  do 
have  real  and  very  great  legislative  powers,  only  those 
should  be  selected  as  judges  who  have  an  enhghtened 
twentieth  century  social  philosophy. 

But  we  are  still  not  at  the  end  of  our  American  de- 
velopment, for  we  are  supplementing  our  courts  with 
commissions  like  the  Wisconsin  Railroad  Commission, 
and  the  Wisconsin  Industrial  Commission.     Society 


214    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

has  become  so  complex  that  in  many  intricate  cases  the 
ordinary  judicial  procedure  is  quite  inadequate,  and  it 
is  necessary  to  provide  the  courts  with  funds  and  in- 
strumentalities for  investigations  or  to  transfer  part 
of  their  work  to  other  special  bodies.  Generally  Amer- 
ican States  are  choosing  the  latter  method  of  meeting 
the  situation  and  creating  commissions  of  experts  who 
are  provided  with  the  financial  resources  and  the  human 
machinery  to  investigate  cases.  These  commissions 
give  decisions  in  opinions  which  in  reality  are  judicial 
in  nature  and  which  courts  in  most  cases  must  accept, 
because  the  commissions  alone  have  the  facts  upon 
which  the  decisions  rest.  Frequently  when  the  courts 
have  gone  astray  in  their  decisions  as  in  the  Bakers* 
Case  (Lochner  v.  N.  Y.,  198  U.  S.  45,  treated  at  length 
in  Part  II,  Appendix  to  Chapter  VIII  of  the  present 
work)  it  is  because  the  decisions  have  not  been  based 
on  an  accurate  statement  of  facts  and  social  theory.  We 
see  that  social  purpose  in  this  case  also  finds  a  method 
of  escape  from  difficulties  which  economic  evolution 
has  brought  with  it. 

With  the  development  of  the  judiciary  which  has 
been  described,  supplemented  by  appropriate  quasi- 
judicial  agencies  like  the  commissions  which  have 
reached  perhaps  their  highest  development  in  Wis- 
consin,^^ it  may  be  maintained  that  the  American 
method  of  developing  and  protecting  private  property 
is  the  best  ever  devised. 

And  what  is  here  said  about  property  holds  equally 
with  respect  to  contract,  vested  rights  and  personal 
freedom.    The  police  power  tells  what  regulations  are 


PROPERTY  AND  THE  POLICE  POWER  215 

consistent  with  freedom  of  contract,  etc.  And  all  this 
is  something  which  no  man  could  have  foreseen.  It 
is  a  result  of  the  action  of  English  common  sense,  of 
English  political  wisdom,  of  German  and  Scandinavian 
sturdiness,  in  short  of  the  intellectual  and  moral  quali- 
ties of  the  Teutonic  races,  brought  to  bear  on  novel 
conditions. 

Police  comes  from  the  Greek  word  TroXtreia,  and  it 
means  policy,  public  policy,  the  welfare  of  the  state — • 
or  of  society  organised  as  state.  And  this  old  mean- 
ing of  the  term  is  found  in  use  in  England  certainly  un- 
til the  latter  part  of  the  eighteenth  century.  Adam 
Smith's  definition  of  police  as  presented  in  the  published 
notes  on  his  ''Lectures  on  Justice,  Police,  Revenue  and 
Arms,"  is  as  follows:  ''The  objects  of  police,  the  cheap- 
ness of  commodities,  public  security  and  cleanliness,  if 
the  two  last  were  not  too  minute  for  a  lecture  of  this 
kind.  Under  this  head  we  will  consider  the  opulence 
of  a  state."  ^^  And  as  Professor  Cannan  shows  us  this 
part  of  Adam  Smith's  lectures  dealing  with  police  be- 
came finally  his  Inquiry  into  the  Nature  and  Cause  of  the 
Wealth  of  Nations. ^^ 

Gradually,  however,  the  word  came  in  England  and 
America  to  have  the  narrow  meaning  of  "an  organised 
civil  force  for  maintaining  order,  preventing  and  detect- 
ing crime,  and  enforcing  the  laws."  {Century  Diction- 
ary.) At  the  same  time,  however,  we  have  the  legal 
and  larger  meaning:  "Public  order:  the  regulation  of  a 
country  or  district  with  reference  to  the  maintenance 
of  order;  more  specifically,  the  power  of  each  state  .  .  . 
for  the  suppression  or  regulation  of  whatever  is  injurious 


216     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  the  peace,  health,  morahty,  general  intelligence,  and 
thrift  of  the  community  and  its  internal  safety."  {Cen- 
tury Dictionary.) 

Now  this  legal  scope  of  police  has  grown  and  become 
more  positive  and  constructive  in  character  until  under 
the  peculiar  constitutional  conditions  obtaining  in  the 
United  States,  it  has  acquired  its  old  scope. 

It  is  instructive  at  this  point  to  consider  the  German 
use  of  the  corresponding  term  and  of  "Police  Science" 
(Polizeiwissenschaft)  dealing  with  police.  And  we  can 
do  no  better  than  to  turn  to  the  article  on  "  Polizei " 
by  Professor  Edgar  Loening  in  the  Handworterbuch  der 
Staatswissenschaften  (First  edition,  1893).^* 

Loening  discusses  under  Polizeistaat  und  Polizei- 
wissenchaft  the  concept  Polizei.  In  the  sixteenth  and 
seventeenth  centuries  the  mediaeval  state  was  trans- 
formed into  the  modern  state,  taking  on  new  functions. 
Many  of  these,  like  education,  were  transferred  from  the 
Church.  Included  within  the  functions  of  the  state  was 
the  maintenance  of  law  and  order  as  a  condition  of 
economic  prosperity,  without  which  the  army  could  not 
be  maintained  and  other  public  duties  be  performed; 
but  this  was  only  one  among  other  functions.  The  en- 
tire social  and  cultural  life  was  embraced  within  the 
sphere  of  the  state,  and  this  was  all  included  under 
police.  ''Thus  the  state  gradually  drew  the  entire  cul- 
tural life  of  the  nation  within  the  sphere  of  its  activity 
and  these  new  functions  of  the  state  were  all  included 
under  the  expression  the  establishment  and  mainte- 
nance of  good  police."  ^^  Separated  were  private  law, 
criminal  law,  what  the  Germans  call  Rechtspflege  (Jus- 


PROPERTY  AND  THE  POLICE  POWER  217 

tice),  military  affairs  and  finance.  In  the  eighteenth 
century  this  idea  was  formulated  scientifically.  ''In 
1705  appeared  the  first  volume  of  the  great  work,  in 
folio,  of  La  Mare,  Traite  de  la  Police  (the  2nd  and  3d 
volumes  appearing  in  1710  and  1719;  2nd  ed.  in  1722.") 
Both  editions  appeared  in  Paris,  and  in  1738  a  fourth 
supplementary  volume  appeared.  The  wide  circula- 
tion of  the  work  is  indicated  by  its  appearance  in  a 
separate  edition  in  Amsterdam  also.  It  discussed  the 
internal  administration  of  France,  with  special  atten- 
tion to  Paris.  In  1713  Frederick  William  I  of  Prussia 
separated  out  police  in  this  sense  from  military  and 
financial  affairs,  etc.,  and  made  it  equivalent  to  in- 
ternal administration.  This  was  the  prevalent  mean- 
ing in  the  eighteenth  century  literature  under  the  name 
of  Polizeiwissenschaft,  and  continued  to  be  the  mean- 
ing until  recent  times.  See,  for  example,  Robert  von 
MohFs  Polizeiwissenschaft  (3  vols.,  3d  ed.,  1866).  But 
von  Mohl  placed  police  in  the  narrow  sense  under 
Rechstpfiege,  making  it  a  further  subhead  under  the 
name  preventive  justice  (Prdventivjustiz) ,  that  is  the 
activity  of  the  state  which  has  to  do  with  the  preven- 
tion of  criminal  disturbance  of  the  peace. 

Professor  von  Loening  discusses  further  the  narrow 
concept  of  police  as  meaning  the  prevention  and  sup- 
pression of  disturbances  of  public  peace  and  order. 
Louis  XIV  in  1667  established  police  in  this  narrow 
sense  to  put  down  lawlessness  in  Paris.  This  was  taken 
from  the  city  and  transferred  to  a  state  official,  the 
"  Lieutenant  general  de  la  police."  Frederick  the  Great 
followed  this  example  in  1742  and  transferred  the  police 


218    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

power  from  the  Magistracy  {Magistral)  of  Berlin  to  a 
royal  director  of  the  police.  J.  St.  Piitter  first  treated 
police  in  this  narrow  sense  scientifically  in  his  Insti- 
tutiones  Juris  publici  Germanid  (1st  ed.,  1770,  5th.  ed. 
1792).  According  to  him,  the  function  of  the  pohce  was 
to  prevent  future  evils  {cura  avertendi  mala  fulura)  and 
he  opposed  this  to  the  positive  right  of  promoting  the 
pubUc  welfare  {jus  promovendi  salutem  publicam)  ^^ 

As  in  the  United  States  all  property  is  held  subject  to 
regulations,  restrictions,  and  burdens  under  the  police 
power,  it  is  appropriate  to  quote  from  opinions  of  the 
United  States  Supreme  Court  giving  the  views  of  that 
high  tribunal  in  noteworthy  cases.  In  the  celebrated 
Slaughter  House  Cases  (1872)  we  find  the  following 
said  of  the  police  power: 

"  The  power  is,  and  must  he  from  its  very  nature,  incapable 
of  any  very  exact  definition  or  limitation.  Upon  it  depends  the 
security  of  the  social  order,  the  life  and  health  of  the  citizen, 
the  comfort  of  an  existence  in  a  thickly  populated  communit}'', 
the  enjoyment  of  private  and  social  life,  and  the  beneficial 
use  of  property.  As  says  another  eminent  judge,  *.  .  .  Per- 
sons and  property  are  subjected  to  all  kinds  of  restraints  and 
burdens  in  order  to  secure  the  general  comfort,  health,  and 
prosperity  of  the  State.  Of  the  perfect  right  of  the  legisla- 
ture to  do  this,  no  question  ever  was,  or,  upon  acknowledged 
general  principles,  ever  can  he  made,  so  far  as  natural  persons 
are  concerned.'  (Thorpe  v.  Rutland  &  Burlington  R.  R.  Co., 
27  Vt.  139,  1854)." 

This  is  clearly  stated  by  Chief  Justice  Lemuel  Shaw : 
''AH  property  is  acquired  and  held  under  the  tacit  con- 
dition that  it  shall  not  be  used  so  as  to  injure  the  equal 
rights  of  others,  or  to  destroy  or  greatly  impair  the  pub- 


PROPERTY  AND  THE  POLICE  POWER  219 

lie  rights  and  interests  of  the  community;  under  the 
maxim  of  the  common  law,  Sic  utere  tuo  ut  alienum  non 
laedas.^'  ^'^ 

In  the  case  of  People's  Gas  Co.  v.  Tyner,  131  Ind.  277 
(1891),  at  p.  281,  it  was  held  that,  ''The  rule  that  the 
owner  has  the  right  to  do  as  he  pleases  with  or  upon  his 
own  property  is  subject  to  many  limitations  and  re- 
strictions, one  of  which  is  that  he  must  have  due  regard 
for  the  rights  of  others."  It  is  settled  that  the  owner  of 
a  lot  may  not  erect  and  maintain  a  nuisance  thereon 
whereby  his  neighbours  are  injured. 

But  another  step  forward  was  clearly  and  definitely 
taken  in  1906  and  1907  when  the  Supreme  Court  of 
the  United  States  rejected  the  view  that  the  police 
power  was  merely  negative  in  character  and  took 
the  position  that  it  was  a  positive  and  constructive 
power. 

In  a  decision  rendered  in  1907,  in  the  case  of  Bacon  v. 
Walker,  appealed  from  the  decision  of  the  Supreme 
Court  of  Idaho,  we  read  (204  U.  S.,  311,  317,  318), 
(the  plaintifTs)  "have  fallen  into  the  error  exposed  in 
C.  B.  &  Q.  R.  R.  Co.  V.  Drainage  Com.,  200  U.  S.,  561, 
592  (1906).  In  that  case  we  rejected  the  view  that  the 
police  power  cannot  be  exercised  for  the  general  well- 
being  of  the  community.  That  power,  we  said,  em- 
braces regulations  designed  to  promote  the  public 
health,  the  public  morals,  or  the  public  safety  .  .  . 
(the  power  of  the  state)  is  not  confined  as  we  have  said 
to  the  suppression  of  what  is  offensive,  disorderly,  or 
insanitary.  It  extends  to  so  dealing  with  the  conditions 
which  exist  in  the  state  as  to  bring  out  of  them  the 


220     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

greatest  welfare  of  the  people.    This  is  the  principle  of 
the  cases  which  we  have  cited." 

Still  more  noteworthy  is  the  opinion  of  the  court  as 
expressed  by  Mr.  Justice  Holmes  in  Noble  State  Bank 
V.  Haskell. 

"'The  police  power  extends  to  all  the  great  public  needs. 
It  may  be  put  forth  in  aid  of  what  is  sanctioned  by  usage, 
or  held  by  the  prevailing  morality  or  the  strong  and  preponderant 
opinion  to  be  greatly  and  immediately  necessary  to  the  public 
welfare.'"  ^^ 

Now  there  is  more  in  this  police  power  than  regula- 
tion of  property  relations  and  contractual  relations. 
But  there  is  no  difficulty  except  where  property  and 
economic  relations  are  concerned.  No  one  objects  to 
general  benevolence — to  doing  good  without  cost — so 
when  we  consider  police  power,  its  essence  is  the  inter- 
pretation of  property,  and  when  we  consider  the  real 
essence  of  the  police  power  as  found  in  the  leading 
American  decisions  we  find  that  it  is  consistent  with  this 
concept.  It  is  that  power  of  the  courts  committed  to  them  by 
American  Constitutions  whereby  they  must  shape  property 
and  contract  to  existing  social  conditions  by  settling  the 
question  of  how  far  social  regulations  may,  without  compen- 
sation, impose  burdens  on  property.  It  seeks  to  preserve 
the  satisfactory  development  of  the  individual  and  so- 
cial sides  of  private  property  and  thus  to  maintain  a 
satisfactory  equilibrium  between  them.  And  it  is  note- 
worthy that  compensation  may  be  given  when  prop- 
erty is  destroyed  under  the  police  power  Tuberculous 
cows  are  killed  in  Wisconsin,  but  a  limited  compensa- 
tion is  granted  to  the  owner  in  pursuance  ot  sound  pub- 


PROPERTY  AND  THE  POLICE  POWER  221 

lie  policy,  for  it  lessens  the  temptation  to  conceal  dis- 
ease and  it  diffuses  the  loss. 

Regulation  depends  on  the  past — on  what  was  done 
in  England  when  the  Constitution  was  framed,  that  is, 
precedent — but  likewise  on  present  conditions  and 
sentiments,  as  seen  in  the  quotation  given  from  Mr. 
Justice  Holmes. 

It  is  not  necessary  to  cite  a  great  array  of  cases  to 
prove  the  accuracy  of  the  position  here  taken.  The 
cases  mentioned  already  in  this  work  show  the  develop- 
ment of  this  idea  of  the  police  power.  In  the  Indiana 
Gas  Waste  Case,^^  it  was  held  that  the  owner  of  gas 
could  not  waste  it  in  "flambeau  lights"  because  that 
involved  the  waste  of  his  neighbour's  gas,  drawn  from 
the  same  general  source  of  supply.  In  a  different  nat- 
ural gas  case  in  Oklahoma  it  was  held  that  the  legisla- 
ture could  not  prevent  the  transportation  of  gas  into 
another  State  because  that  imposed  an  unwarranted 
burden  on  property.  ^°'  ^^ 

The  cases  involving  sesthetic  consideration  turn  on 
the  allowable  burdens  on  property.  Mr.  Justice  Holmes 
decided  that  a  small  tax  for  amusements  and  sesthetic 
enjoyments  was  permissible,--  but  the  Superior  Court 
of  Baltimore  decided  that  a  regulation  of  the  width  of 
building  in  a  particular  part  of  the  city  in  the  interest 
of  a  harmonious  urban  development  implied  a  burden 
inconsistent  with  the  idea  of  private  property.-^  On  the 
other  hand  the  regulation  of  the  height  of  buildings  on 
Copley  Square  in  Boston  was  sustained  both  by  the 
Supreme  Court  of  the  State  and  the  Supreme  Court  of 
the  United  States.    But  compensation  was  provided  for 


222     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  owner  of  a  building  which  had  already  been  carried 
beyond  the  prescribed  height.  ^^  Turning  to  the  quasi- 
judicial  opinions  of  the  Wisconsin  Railroad  Commission, 
we  find  that  similar  considerations  determine  these  de- 
cisions. When  the  council  of  the  city  of  Madison  or- 
dered the  wires  and  poles  of  the  Madison  Gas  and  Elec- 
tric Company  to  be  removed  from  the  streets  in  a  certain 
section  of  the  city,  the  Commission  overruled  the  coun- 
cil, because  it  involved  an  unwarranted  burden  on  the 
property  of  the  company  concerned,  intimating,  how- 
ever, that  if  the  ordinance  had  involved  a  general  scheme 
of  improvement,  the  decision  would  possibly  have  been 
different.-^  And  in  a  former  case,  a  somewhat  similar 
ordinance  of  the  city  council  of  La  Crosse  was  upheld 
because  it  involved  a  more  general  plan  of  beautification 
and  under  the  circumstance  the  owners  of  property  had 
to  bear  the  burden  without  compensation.-*^  The  tak- 
ing of  private  property  for  public  purposes  of  an  aes- 
thetic character  under  condemnation  proceedings  is  a 
different  matter  and  involves  different  principles.  What 
is  then  involved  is  the  question  of  public  purpose  which 
alone  can  justify  the  taking  of  private  property;  fur- 
thermore the  question  of  taxation  of  private  property 
in  order  to  pay  for  the  property  taken.  All  this  will  re- 
ceive consideration  later. 

If  we  consider  the  cases  which  have  been  the  subject 
of  more  or  less  bitter  controversy  and  which  have  by 
some  been  held  to  warrant  the  so-called  recall  of  judicial 
decisions,  we  shall  find  that  they  imply  the  correctness 
of  the  view  here  presented  of  the  police  power.  We  may 
consider  as  illustration  the  cases  cited  by  Professor 


PROPERTY  AND  THE  POLICE  POWER  223 

Albert  M.  Kales,  of  the  Law  School  of  the  Northwestern 
University,  in  a  paper  read  before  the  Illinois  Bar  As- 
sociation in  which  he  advocated  the  recall  of  decisions 
of  State  supreme  courts.  Three  cases  cited,  merely  typ- 
ical, are  described  as  follows: 

"Since  1886  our  Supreme  Court  has  held  void  acts  of  the 
Legislature  compelling  mine  owners  to  weigh  coal  mined  and 
to  pay  the  miners  on  the  basis  of  such  weight,  because  such 
acts  took  the  mine  owner's  liberty  and  property  without 
due  process  of  law,  contrary  to  the  provisions  of  the  State 
Constitution.^^ 

"  The  United  States  Supreme  Court,  however,  has  held  that 
a  similar  act  from  Arkansas  did  not  violate  the  '  life,  liberty 
and  property'  clause  of  the  fourteenth  amendment.^^ 

"Since  1892  our  Supreme  Court  has  held  void  State  acts 
regulating  the  keeping  of  truck  stores  by  owners  of  coal 
mines  and  factories,  because  they  deprived  such  owners 
of  liberty  and  property  without  due  process  of  law,  con- 
trary to  the  State  Constitution.-^ 

"In  1886  the  Pennsylvania  Supreme  Court  held  void 
an  Act  which  prohibited  the  payment  of  wages  to  miners 
in  anything  but  money. ^'^ 

"Yet  the  United  States  Supreme  Court  holds  that  such 
Acts  are  not  in  violation  of  the  'life,  liberty  and  property' 
clause  of  the  fourteenth  amendment. ^^ 

"  In  1896  our  Supreme  Court  held  void  the  barbers'  Sunday 
law,  which  forbade  the  employment  of  barbers  on  Sunday, 
because  the  act  violated  the  '  life,  liberty  and  property '  clause 
of  the  State  Constitution.^^ 

"But  the  United  States  Supreme  Court  sustained  a  like 
Act  from  Minnesota,  declaring  that  it  did  not  violate  the 
'life,  liberty  and  property'  clause  of  the  Federal  Constitu- 
tion." 33 

A  notable  work  on  the  Police  Power  is  that  by  Mr. 


224    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

W.  G.  Hastings,  the  ''crowned"  essay  which  was 
awarded  a  large  prize  by  the  American  Philosophical 
Society  in  1900.  After  reviewing  in  an  able  manner  the 
decisions  bearing  on  the  police  power,  he  comes  to  the 
conclusion  that  the  police  power  is  a  jBction,  but  the 
whole  book  is  a  demonstration  of  the  position  taken  in 
this  chapter. 

We  cannot  now  and  here  go  further  into  the  police 
power  to  which  we  return  later.  But  the  careful  student 
of  the  subject  would  do  well  to  study  the  cases  men- 
tioned under  the  Police  Power  in  Appendix  IV  and  the 
cases  cited  under  the  Police  Power  in  Thayer's  Cases 
on  Constitutional  Law;  also  Goodnow's  Social  Reform 
and  the  Constitution  and  Freund's  Police  Power. ^"^ 
Enough  has  been  said  to  show  that  its  existence  is 
based  on  the  social  theory  of  private  property.  When 
the  student  first  examines  property  and  contract  as 
found  in  American  Constitutions,  he  may  not  unnatur- 
ally be  filled  with  despair  in  respect  to  future  progress, 
for  they  seem  to  be  hard  and  inflexible  institutions. 
But  social  purpose  is  like  geological  force;  it  sweeps 
majestically  on,  over-riding  all  obstacles,  and  shap- 
ing all  institutions  to  its  ends.  No  Canute  may  by 
his  feeble  utterance  stop  the  rising  tide  of  reform 
and  progress— hence  the  development  of  the  police 
power. 

The  poHce  power  is  held  to  belong  to  the  separate 
States  in  the  United  States;  and  this  is  simply  because 
they  have  the  residuum  of  sovereignty.  But  the  Federal 
Government  has  essentially  the  same  powers  in  enu- 
merated cases;  and  confusion  has  arisen  because  it  has 


PROPERTY  AND  THE  POLICE  POWER  225 

not  always  been  seen  that  the  essence  of  poUce  power 
is  social  control  over  property. 

The  Federal  Government  exercises  its  control  over 
property  through  the  Admiralty,  Navigation  and  Com- 
merce clauses  of  the  Federal  Constitution  and,  as  time 
goes  on,  these  mean  more  and  more.  They  have  ever 
increasing  significance  in  the  control  of  property  in- 
asmuch as  these  clauses  give  the  Federal  Government 
a  very  far-reaching  regulation  of  transportation  by  sea 
and  land,  and  regulation  means  control  of  property. 
There  have  been  many  conflicts  between  State  and  na- 
tion with  respect  to  the  control  of  transportation.  The 
nation  gains  an  ever  increasing  field.  Even  commerce 
which  at  first  appears  to  be  intrastate  is  found  to  have 
a  connection  with  interstate  commerce  and  thus  passes 
under  Federal  regulation.  The  question  of  regulation 
is  one  of  how  far  the  Federal  Government  may  go  and 
here  the  question  is  one  of  property. 

Take  the  case  of  Munn  t).  Illinois.-''''  It  was  thought 
by  many  that  as  a  result  of  this  decision  the  legislature 
might  use  its  own  discretion  in  determining  the  rate  of 
compensation  for  rail  transportation.  But  subsequent 
decisions  of  the  United  States  Supreme  Court  have 
developed  the  idea  that  if  private  property  is  deprived 
of  its  return  through  rate  regulation,  private  property 
has  been  taken  without  compensation.  Private  prop- 
erty is  valuable  only  on  account  of  the  return  which  it 
yields  and  when  the  owner  is  deprived  of  a  fair  and  legi- 
timate return  on  his  property,  it  is  taken  from  him. 
This  applies,  it  may  be  observed  incidentally,  to  the 
proposal  of  Henry  George  for  taking  the  rent  of  land 


226     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

from  the  owner  for  public  purposes  and  leaving  the 
owner  the  bare  title.  This  takes  all  the  meat  out  of  the 
nut  and  leaves  only  the  worthless  shell.  American 
courts  very  properly  regard  this  as  taking  property 
without  compensation.^^ 

Regulation  is  allowed  but  it  must  be  reasonable.  The 
property  should  have  what  would  be  regarded  as  a 
normal  return  under  competitive  conditions.  It  has 
been  held  in  cases  of  regulation  in  New  York  City  for 
gas  ^^  and  in  Knoxville,  Tenn.^^  for  water  that  6  per 
cent,  is  a  reasonable  return  on  property,  and  that  the 
regulation  of  property  in  these  cases  is  legitimate  if 
this  return  is  allowed.  The  Wisconsin  Railroad  Com- 
mission has  added  this:  that  the  return  to  property  in- 
vested in  public  utilities  must  be  sufficient  to  produce 
a  supply  of  capital. ^^ 

Two  things  help  us  to  determine  the  economic  con- 
cept, property:  the  first  is  what  has  been;  for  this  we  go 
back  in  large  part  to  England  and  the  common  law. 
Here  we  have  precedent.  This  was  brought  out  in  the 
already  cited  leading  case  by  Mr.  Justice  Shaw  given  by 
Thayer  under  Police  Power.'*"  But  in  the  second  place 
it  is  to  be  observed  that  we  are  not  bound  by  precedent 
exclusively.  Broad  scope  is  given  to  prevailing  opinion. 
As  stated  by  Mr.  Justice  Holmes,  it  is  shaped  ''by  the 
prevailing  morality  or  the  strong  and  preponderant 
opinion"  as  to  what  ''is  greatly  and  immediately  neces- 
sary to  the  public  welfare."  '^^ 


Notes  and  References  to  Chapter  VII 

1  P.  200.  See  article  in  the  Independetit  for  April  18,  1908  by 
President  Arthur  T.  Hadley  entitled:  "The  Constitutional  Position 
of  Property  in  America;"  also  in  the  same  periodical  articles  by 
Jesse  F.  Orton,  namely:  "Confusion  of  Property  with  Privilege: 
Dartmouth  College  Case,"  First  Article,  Historical;  Second  Article, 
Legal,  August  19  and  26,  1909;  "Privilege  becomes  Property  under 
the  Fourteenth  Amendment:  the  Consolidated  Gas  Decision," 
First  Article,  Franchise  Value;  Second  Article,  Land  and  Pavement 
Values,  October  12,  1911  and  March  28,  1912;  "An  Amendment 
by  the  Supreme  Court,"  December  5,  1912. 

2  P.  202.  State  is  here  used  in  its  generic,  scientific  sense. 

'P.  202.  Ogg,  Frederic  Austen:  Social  Progress  in  Contemporary 
Europe,  1912,  pp.  38-39.  This  declaration  is  translated  in  Robin- 
son, Readings  in  European  History,  Vol.  II,  409-411. 

^  P.  202.  The  following  quotation  may  serve  as  an  illustration: 

"Government  is  nothing  more  than  a  national  association;  and  the 
object  of  this  association  is  the  good  of  all,  as  well  individually  as  col- 
lectively. Every  man  wishes  to  pursue  his  occupation  and  to  enjoy 
the  fruits  of  his  labours,  and  the  produce  of  his  property,  in  peace 
and  safety,  and  with  the  least  possible  expense.  When  these  things 
are  accomplished,  all  the  objects  for  which  government  ought  to  be 
established  are  answered."    Rights  of  Man,  Chap.  IV. 

^  P.  207.  "Rights  of  property,  like  all  other  social  and  conven- 
tional rights,  are  subject  to  such  reasonable  limitations  in  their 
enjoyment,  as  shall  prevent  them  from  being  injurious,  and  to 
such  reasonable  restraints  and  regulations  established  by  law,  as 
the  legislature,  under  the  governing  and  controlling  power  vested 
in  them  by  the  Constitution,  may  think  necessary  and  expedient. 

"This  is  very  different  from  the  right  of  eminent  domain,  the 
right  of  a  government  to  take  and  appropriate  private  property  to 
public  use,  whenever  the  public  exigency  requires  it;  which  can  be 
done  only  on  condition  of  providing  a  reasonable  compensation 
therefor.  The  power  we  allude  to  is  rather  the  police  power,  the 
power  vested  in  the  legislature  by  the  Constitution,  to  make,  ordain, 

227 


228    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  establish  all  manner  of  wholesome  and  reasonable  laws,  statutes, 
and  ordinances,  either  with  penalties  or  without,  not  repugnant  to 
the  Constitution,  as  they  shall  judge  to  be  for  the  good  and  welfare 
of  the  Commonwealth  and  of  the  subjects  of  the  same."  Common- 
wealth V.  Alger,  Supreme  Judicial  Court  of  Massachusetts,  1851,  7 
Cush.  53.     See  also  Thayer,  Cases  on  Constitutional  Law,  p.  698. 

^  P.  207.  Cf.  on  the  principle  of  public  policy  as  expressing  the 
philosophy  back  of  the  police  power,  Haney's  Business  Organiza- 
tion, pp. 143-4. 

^  P.  207.  See  article  in  the  Harvard  Law  Review,  November  1913, 
by  Herbert  Pope,  entitled  "The  Fundamental  Law  and  the  Power 
of  the  Courts." 

8  P.  210.  See  his  article  on  "Vested  Rights"  in  the  Contemporary 
Review,  Vol.  LVII,  pp.  780-796  (June,  1890). 

3  P.  211.  When  we  look  at  American  civilisation  from  the  point 
of  view  of  labour  it  is  surely  a  great  deal  to  be  able  to  say  that 
many  an  adult  person  living  in  the  Mississippi  Valley  has  never 
seen  an  able  bodied  man  long  seek  work  in  vain.  This  conclusion 
is  based  upon  answers  put  by  the  author  to  students  in  his  classes. 
It  can  also  safely  be  said  that  during  the  more  than  twenty  years 
that  the  author  has  lived  in  Madison,  Wisconsin,  the  labour  supply 
has  been  nearly  always  continuously  less  than  the  demand  and  a 
great  deal  of  labour  worth  doing  has  gone  undone  because  no  com- 
petent person  could  be  found  to  do  it  at  what  was  regarded  as  good 
wages.  During  a  great  part  of  this  time  it  has  been  impossible  to 
find  competent  and  willing  men  ready  to  work  in  one's  garden  at 
twenty-five  cents  an  hour. 

1°  P.  212.  As  an  illustration  may  be  cited  the  reasoning  which 
leads  to  the  conclusion  that  a  law  forbidding  a  working  day  for 
women  in  shops  and  factories  of  eleven  to  fifteen  hours  is  an  inva- 
sion of  their  liberty  to  make  free  contract. 

^'  P.  214.  The  state  regulation  of  public  utilities  and  railroads 
in  Wisconsin  affords  a  splendid  example  of  recognising  the  social 
side  of  property  and  of  paring  down  the  bundle  of  rights  held  by 
the  private  owner.  The  accounts  of  utilities  are  kept  according  to 
the  uniform  form  prescribed  by  the  Commission.  Frequent  re- 
ports to  the  Commission  are  required.  The  Commission  fixes  the 
rate  which  is  reasonable,  allowing  only  a  certain  percentage  of  profit 
on  the  actual  present  cost  of  plant  and  investment  plus  any  uncom- 


PROPERTY  AND  THE  POLICE  POWER  229 

pensated  cost  of  building  up  the  business.  The  municipaUties  may 
buy  the  utihties,  if  they  so  desire,  at  a  valuation  fixed  by  the  State 
Commission.  The  service  rendered  by  private  companies  or  munici- 
pal plants  is  regulated  by  and  must  meet  the  requirements  of  the 
State  Commission.  Depreciation  of  plant  must  be  provided  for. 
Extensions  of  plant  must  be  made  if  found  necessary  by  the  Commis- 
sion. Here  certainly  is  a  great  paring  down  of  the  former  rights 
of  the  private  owner.  He  still  owns  the  property  it  is  true,  but  his 
ownership  carries  with  it  a  management  under  public  direction. 
The  private  owner  at  times  seems  little  more  than  a  manager  of 
the  concern. 

*2  P.  215.  See  Lectures  of  Adam  Smith,  edited  by  Cannan,  p.  3. 

'*  P.  215.  "The  portion  of  jurisprudence  dealing  with  'Police' 
thus  became  with  the  exception  of  a  scrap  about  security  and  bare 
mention  of  Sanitation,  an  'Inquiry  into  the  Nature  and  Causes  of 
the  Wealth  of  Nations.' "    Ibid.  p.  27. 

1^  P.  216.  See  also  Haney's  History  of  Economic  Thought,  Chap. 
VIII,  Kameralism,  and  A.  W.  Small's  book  Cameralism  for  further 
information  on  this  topic, 

15  P.  216.  "So  zog  der  Staat nach und nach das gesammte Kultur- 
leben  des  Volkes  in  den  Kreis  seiner  Tatigkeit  ein  und  diese  neuen 
staatlichen  Aufgaben  wurden  unter  dem  Ausdruck  der  Herstellung 
und  Erhaltung  guter  Polizei  zusammengefasst." 

"  P.  218.  This  is  from  Loening's article  on  Polizei  in  the  Handwor- 
terbuch  der  Staatswissenschaften. 

"  P.  219.  Commonwealth  v.  Tewksbury,  11  MetcaK  (Mass.),  55 
(1846),  at  p.  57. 

18  P.  220.  Noble  State  Bank  v.  Haskell,  219  U.  S.  110  (1911), 
p.  111. 

lap.  221.  Townsend  v.  The  State,  147  Ind.  624,  47  N.  E.  19 
(1897);  Ohio  Oil  Co.  v.  Indiana,  177  U.  S.  190  (1900). 

2"  P.  221.  Case  of  Oklahoma  v.  Kansas  Natural  Gas  Co.,  221 
U.  S.  229  at  p.  252(1911). 

21  P.  221.  The  following  group  of  cases  in  regard  to  waste  of  waters 
is  especially  instructive  in  this  connection.  In  Hathorn  v.  Natural 
Carbonic  Gas  Company,  194  N.  Y.  326,  87  N.  E.  Rep.  504  (1909), 
the  New  York  Court  of  Appeals  passed  upon  a  statute  of  1908  relat- 
ing to  the  protection  of  natural  mineral  springs,  wiu(!h  prohibited 
the  pumping  of  percolating  water  or  natural  carbonic  gas  from  wells 


230    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

bored  into  the  rock,  first,  absolutely  and  without  qualifications; 
second,  when  the  result  of  so  doing  would  be  to  impair  the  natural 
flow  or  the  quahty  of  the  waters  or  gas  in  the  springs  or  wells  of  an- 
other person;  third,  when  the  object  of  so  doing  is  to  extract  and 
collect  the  carbonic  gas  for  market.  It  was  held  that  the  first  and 
second  prohibitions  are  unconstitutional  as  taking  the  use  and  en- 
joyment of  private  property;  a  land  owner  being  prohibited  from 
extracting  waters  from  a  bored  well  on  his  premises  for  purposes 
connected  with  the  use  of  his  premises,  even  if  it  does  not  interfere 
with  others.  He  has  a  vested  right  to  draw  percolating  water  from 
under  his  lands  by  pumps  for  purposes  legitimately  connected  with 
the  enjoyment  of  his  lands,  even  though  it  interferes  with  others. 

The  third  prohibition  is  constitutional;  the  land  owner  having 
no  vested  right  unreasonably  to  force  the  flow  of  percolating  waters 
for  any  purpose  not  connected  with  the  use  or  enjoyment  of  his  land. 
(See  Decennial  Digest,  Constitutional  Law,  sec.  92.)  The  court 
distinguishes  the  case  of  Huber  v.  Merkel,  117  Wisconsin,  355, 
94  Northwestern,  354  (1902),  where  the  Supreme  Court  of  Wiscon- 
sin held  unconstitutional  a  statute  providing  in  substance  that  any 
owner  or  operator  of  an  artesian  well  who  permitted  it  to  discharge 
more  water  than  was  reasonably  necessary  for  his  use,  thereby 
diminishing  the  flow  of  water  in  another  artesian  well  in  the  same 
vicinity,  should  be  liable  for  damage.  The  New  York  court  dis- 
approves some  of  the  broad  statements  made  in  the  opinion  of  the 
Wisconsin  court,  sustaining  the  right  of  the  owner  of  lower  artesian 
wells  to  waste  the  water  to  the  ruination  of  artesian  wells  higher  up. 

There  is  a  steady  trend  of  decision  in  America  away  from  the 
English  rule  that  there  are  no  correlative  rights  in  the  percolat- 
ing waters  oozing  through  the  earth.  The  case  of  Forbell  v.  New 
York,  164  N.  Y.  522  (1900)  took  the  lead  in  the  East;  Katz  v. 
Walkinshaw,  141  California  116  (1903),  took  the  lead  in  Western 
jurisdictions.  The  Wisconsin  court  goes  to  the  extraordinary  ex- 
treme of  holding  that  not  only  are  there  no  correlative  rights  at 
common  law  as  to  the  percolating  waters,  so  that  the  owner  may 
divert,  consume  or  waste  them  with  impunity;  but  that  a  statute 
restricting  the  owner  of  an  artesian  well  to  what  is  reasonably  neces- 
sary for  his  use  is  not  a  proper  exercise  of  the  police  power;  and  that 
the  right  of  a  land  owner  to  be  malicious  is  a  property  right  which 
cannot  be  taken  away  or  impaired  by  the  community,  except  under 


PROPERTY  AND  THE  POLICE  POWER  231 

the  power  of  eminent  domain.  This  case  was  decided  on  English 
authority  before  the  current  of  American  authoritj'  set  the  other 
way,  but  it  is  one  of  the  most  reactionary  cases  in  the  books  in  the 
limits  which  it  sets  upon  the  pohce  power. 

In  the  case  of  People  v.  New  York  Carbonic  Gas  Company,  196 
N.  Y.  421,  90  Northeastern,  441,  the  New  York  Court  of  Appeals 
explains  its  decision  in  the  case  of  Hathorn  v.  Natural  Carbonic  Gas 
Company,  194  N.  Y.  326,  supra.  It  is  there  explained  that  the  act 
of  the  legislature  must  be  supported  as  a  regulation  of  the  conflict- 
ing rights  of  land  owners  who  derive  enjoyment  or  profit  from  the 
use  of  these  waters  within  the  earth  and  of  their  constituent  in- 
gredients or  gases.  In  that  aspect  the  enactment  was  a  proper  exer- 
cise of  the  police  power,  by  which  government  regulates  the  inter- 
course of  citizens  and  insures  "to  each  the  unimpaired  enjoyment 
of  his  own,  so  far  as  is  reasonably  consistent  with  an  equal  enjoy- 
ment of  rights  by  others," 

The  court  goes  on  to  say  "  It  is  for  the  interest  of  the  state  that 
no  one  should  use  his  own  property  improperly ;  but  the  state  could 
not,  under  the  plea  of  protecting  its  natural  resources,  arbitrarily 
arrest  the  work  of  the  defendants  and  deprive  them  of  the  right  to 
prosecute  a  lawful  business,  whatever  its  effect  on  the  subterranean 
mineral  waters  and  gases.  Such  a  use  of  the  police  power  would  be 
highly  unreasonable,  and  irreconcilable  with  the  rules  of  law  under 
which  rights  of  property  have  been  held  and  recognized.  ...  It 
does  not  appear  that  the  state  has  any  property  in  mineral  springs 
to  protect.  The  land  affected  is  held  in  private  ownership;  and  if 
the  rights  of  an  owner  to  its  full  use  and  enjoyment  in  lawful  ways 
are  destroyed  or  impaired,  that  the  constitution  of  the  state  forbids, 
unless,  when  taken  for  public  uses,  just  compensation  be  made." 

Cullen,  C.  J.,  in  his  concurring  opinion  says:  "It  is  urged  that 
the  public  have  such  an  interest  in  the  mineral  waters  of  Saratoga, 
because  of  their  great  curative  and  health-giving  properties,  that 
the  Legislature  may  interpose  for  their  protection  under  the  right 
of  the  state,  in  the  exercise  of  its  police  power,  'to  protect  and  de- 
velop its  natural  resources,'  even  though  the  waters  themselves  are 
the  property  of  private  persons.  I  deny  that  the  police  power  vests 
in  the  Legislature  any  such  right.  .  .  .  But  under  that  power  the 
Legislature  cannot  require  an  owner  to  use  his  property  for  the  ad- 
vantage and  benefit  of  others,  or  of  the  public,  or  even  for  his  own 


232     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

benefit,  nor  restrict  him  from  devoting  it  to  such  purpose  as  he  sees 
fit,  or  even  from  wasting  it,  provided  such  use  does  not  conflict  with 
the  rights  of  others  or  of  the  pubhc,  A  man  owning  a  coal  mine 
may  mine  the  coal  and  waste  it,  regardless  of  the  interest  of  the 
present  generation  or  of  succeeding  ones.  It  is  not  that  such  con- 
duct would  not  be  an  evil,  but  because  the  people  who  framed  our 
system  of  government,  taught  by  experience,  deemed  it  wiser  to 
trust  the  use  of  property  to  the  dictates  of  the  intelligent  self- 
interest  of  the  owner  rather  than  to  subject  it  to  governmental  in- 
terference." 

In  other  words  the  Hathom  case  is  supported  as  an  adjustment  of 
conflicting  private  rights  and  the  apportionment  of  the  common 
property  rights  among  several  owners.  Could  there  be  a  more 
complete  repudiation  of  the  idea  that  property  is  a  trust,  or  owes 
any  social  obligations,  or  that  the  police  power  extends  to  the  ex- 
pression and  assertion  of  social,  public  or  community  rights  and 
interests  as  a  limitation  upon  the  exercise  of  private  rights?  This 
position  is  disheartening  to  conservationists  particularly.  It  is 
unethical  as  anti-social.  The  view  expressed  with  respect  to  the 
adequacy  of  self-interest  to  control  was  long  ago  rejected  by 
science.  On  the  other  hand  with  general  enlightenment  we  have 
reason  to  believe  that  the  courts  will  also  take  a  larger  and  more 
scientific  view.  Past  experience  warrants  this  belief.  Furthermore 
in  a  better  legal  education  and  in  proper  selection  of  judges,  as 
recommended  in  this  work,  we  have  remedies. 

22  P.  221.  Hubbard  v.  Taunton,  140  Mass.  p.  468. 

23  P.  221.  Hampson  v.  Appeal  Tax  Court — not  of  record — but  cf. 
Bostick  V.  Sams,  95  Md.  400  (1902)  and  Cochran  v.  Preston,  108 
Md.  220  (1908).  And  see  extract  from  letter  from  Mr.  Justice 
Harlan  of  Maryland  in  Part  I,  Chap.  VI,  note  15,  pp.  195-197. 

24  P.  222.  Attorney  General  v.  Williams,  174  Mass.  476  (1899). 
Statute  regulated  height  of  building,  but  provided  compensation 

for  same.  Is  this  a  constitutional  regulation?  Knowlton,  J.  sug- 
gests that  case  might  go  on  theory  of  safety,  as  other  statutes  in 
other  States  on  height  usually  go.  (p.  478.)  The  court  suggests 
that  the  city  in  planning  this  square  is  planning  a  park. 

On  p.  480  (of  parks):  "For  this  reason  it  has  always  been 
deemed  proper  to  expend  money  in  the  care  and  adornment  of 
them  to  make  them  beautiful  and  enjoyable.    This  aesthetic  effect 


PROPERTY  AND  THE  POLICE  POWER  233 

never  has  been  thought  unworthy  of  careful  consideration  by  those 
best  qualified  to  appreciate  it.  It  hardly  would  be  contended  that 
the  same  reasons  which  justify  the  taking  of  land  for  a  pubhc  park 
do  not  also  justify  expenditure  of  money  to  make  the  park  attrac- 
tive and  educational  to  those  whose  tastes  are  being  formed  and 
whose  love  of  beauty  is  being  cultivated." 

25  P.  222.  In  re  Application  of  the  Madison  Gas  and  Electric 
Company  to  Review  an  Ordinance  of  the  City  of  Madison,  etc., 
Wisconsin  Railroad  Commission  Reports,  Vol.  12,  p.  293  (1913). 

28  p.  222.  City  of  La  Crosse  v.  Wisconsin  Telephone  Company, 
Wisconsin  Railroad  Commission  Reports  ,Vol.  7,  p.  435. 

2^  P.  223.  Millett  v.  The  People,  117  111.  294  (1896);  Ramsey  v. 
The  People,  142  111.  380  (1892);  Harding  v.  The  People,  160  111.  459 
(1896). 

28  P.  223.  McLean  v.  Arkansas,  211  U.  S.  539  (1908). 

2'P.  223.  Frorer  v.  The  People,  141  111.  171  (1892);  Kellyville 
Coal  Co.  V.  Harrier,  207  111.  624  (1904). 

=>»  P.  223.  Godcharles  v.  Wigeman,  113  Pa.  431  (1886). 

31  P.  223.  Knoxville  Iron  Co.  v.  Harbison,  183  U.  S.  13  (1901). 

32  P.  223.  Eden  v.  The  People,  161  111.  296  (1896). 
"  P.  223.  Petit  V.  Minnesota,  177  U.  S.  164  (1898). 

34  P.  224.  Professor  Freund  defines  the  police  power  as  follows: 

"/i  {the  state)  exercises  its  compulsory  powers  for  the  prevention 
and  anticipation  of  wrong  by  narrowing  common  law  rights  through 
conventional  restraints  and  positive  regulations  which  are  not  confined 
to  the  prohibition  of  wrongful  acts.  It  is  this  latter  kind  of  state  con- 
trol which  constitutes  the  essence  of  the  police  power.  The  maxim 
of  this  power  is  that  every  individual  must  submit  to  such  restraints 
in  the  exercise  of  his  liberty  or  his  rights  of  property  as  may  be  required 
to  remove  or  reduce  the  danger  of  the  abuse  of  these  rights  on  the  part 
of  these  who  are  unskillful,  careless  or  unscrupulous." 

Professor  Freund  supplements  his  definition  with  the  following 
remarks : 

"  It  has  been  inferred  from  this  vagueness  of  the  term  police,  that 
the  idea  of  the  police  power  must  bo  ccjually  undefined,  and  a  recent 
author  has  gone  so  far  as  to  deny  its  existence,  treating  it  as  a  fiction, 
and  holding  it  equivalent  to  indefinite  supremacy.  The  inference 
is,  however,  unwarranted.  As  soon  as  the  idea  of  the  police  became 
the  centre  and  foundation  of  a  governmental  power,  the  exercise 


234     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  which  had  to  justify  itself  in  tlie  face  of  constitutional  limita- 
tions, the  courts  were  bound  to  use  the  term  with  greater  care,  and 
to  attempt  to  define  it.  From  the  mass  of  decisions  in  which  the 
nature  of  the  power  has  been  discussed,  and  its  application  either 
conceded  or  denied,  it  is  possible  to  evolve  at  least  two  main  attri- 
butes or  characteristics  which  differentiate  the  police  power:  it 
aims  directly  to  secure  and  promote  the  pubhc  welfare,  and  it  does 
so  by  restraint  and  compulsion.  .  .  .  It  (an  examination  of  statutes 
and  decisions)  will  reveal  the  police  power  not  as  a  fixed  quantity, 
but  as  the  expression  of  social,  economic  and  pohtical  conditions. 
As  long  as  these  conditions  vary,  the  police  power  must  continue  to 
be  elastic,  that  is,  capable  of  development."  Police  Power  (1904), 
pp.  3,  6. 

36  P.  225.  Munn  v.  Illinois,  94  U.  S.  113. 

3«  P.  226.  This  idea  is  admirably  developed  in  Eaton  v.  The 
Boston,  Concord  and  Montreal  Railroad,  51  N.  H.  504  (1872), 
especially  pp.  510-12.  This  case  is  of  special  importance  because 
it  is  stated  in  the  opinion  that  property  may  be  taken  if  value  is  re- 
moved or  greatly  lessened  although  the  mere  empty  titles  or 
"  insignia  of  ownership  "  are  left. 

"  P.  226.  Consolidated  Gas  Co.  v.  New  York,  157  Fed.  849, 
855,  affirmed  in  212  U.  S.  52. 

38  P.  226.  Knoxville  v.  Water  Co.,  212  U.  S.  9.  CJ.  Smythe  v. 
Ames,  169  U.  S.  466  (1897) ;  Stanislaus  Co.  v.  San  Joaquin,  etc.,  192 
U.  S.  201;  Steanerson  v.  Great  Northern  R.  C,  69  Minn.  374.  See 
also  list  of  cases  in  note  on  p.  296,  Sec.  312  of  Beale  and  Wyman 
on  The  Law  of  Railroad  Rate  Regulation.  Only  the  limits  of  space 
prevent  a  much  fuller  discussion  of  the  cases,  but  after  all  the 
reader  must  remember  that  this  is  primarily  an  economic  treatise 
and  not  a  law  book.    Only  illustrative  cases  can  be  given. 

39  P.  226.  Hill  et  al.  v.  Antigo  Water  Co.,  3  W.  R.  C.  R.,  623,  726, 
764  (1909);  In  re  Menominee  and  Marinette  Light  and  Traction 
Co.,  3  W.  R.  C.  R.  778,  793  (1909);  Superior  Commercial  Club  et 
al.  V.  Superior  Water,  Light  and  Power  Co.,  10  W.  R.  C.  R.,  704, 
758  (1912). 

^•^  P.  226.  Commonwealth  v.  Alger,  Supreme  Judicial  Court  of 
Mass.,  7  Cush.  53  (1851),  given  in  Thayer's  Cases  on  Constitutional 
Law,  Vol.  I,  pp.  693,  695-6. 

*^  P.  226.  Among  hundreds  of  cases  the  following  are  cited  as 


PROPERTY  AND  THE  POLICE  POWER  235 

having  interest  in  this  connection:  State  v.  Redmon  (Wis.)  114  N. 
W.  137  (1907)  considers  the  right  of  the  public  to  compel  the  clos- 
ing of  the  upper  Pulknan  berth  when  unoccupied  (decided  against 
the  public) ;  the  law  was  slightly  changed  and  prohibited  the  rail- 
way company  from  lowering  the  upper  berth  when  unoccupied  and 
this  law  was  sustained  by  the  Supreme  Court  of  Wisconsin  in  State 
V.  C.  M.  &  St.  P.,  152  Wis.  342.  (Feb.  1913)  the  court  holding  that 
sec.  1636p  (L.  1911,  Ch.  272)  is  a  general  law  designed  to  contrib- 
ute to  the  general  welfare  of  all  the  people:  Bonnett  v.  Vallier  (Wis.) 
116  N.  W.  8S5  (190S)  dealing  with  the  regulation  of  tenement  build- 
ings (held  that  the  law  was  unreasonable  and  unconstitutional  and 
therefore  void) ;  Benz  et  al.  v.  Kremer  et  al.  (Wis.)  125  N.  W.  99  (1910) 
dealing  with  the  regulation  of  bakeries  (law  upheld) ;  State  ex  rel. 
Wausau  St.  Ry.  Co.  v.  Bancroft,  Atty.  Gen.  et  al.,  and  State  ex  rel. 
Jackson  Milling  Co.,  et  al.  v.  same  (Wis.)  134  N.  W.  330  (1912) 
(States  do  not  have  the  right  to  confiscate  property  under  guise  of 
regulation):  Ives  v.  South  Buffalo  R.  R.  Co.,  201  N.  Y.  271  (1911). 
This  is  the  well-known  case  in  which  the  Court  of  Appeals  of  New 
York  State  overthrew  the  compulsory  insurance  law  of  that  State, 
holding  that  it  took  property  without  due  process  of  law,  and  going 
back  to  the  common  law  of  England  to  ascertain  what  constituted 
property.  The  court  said,  "One  of  the  inalienable  rights  of  every 
citizen  is  to  hold  and  enjoy  his  property  until  it  is  taken  from  him 
by  due  process  of  law.  When  our  Constitutions  were  adopted  it 
was  the  law  of  the  land  that  no  man  who  was  without  fault  or  negli- 
gence could  be  held  liable  in  damages  for  injuries  sustained  by 
another. ' '  The  law  was  held  to  be  repugnant  to  the  State  and  Federal 
Constitutions,  but  it  was  intimated  that  the  people  of  New  York 
were  competent  to  change  the  content  of  property  in  the  particular 
under  consideration  by  changing  the  State  Constitution,  and  this 
they  have  done  and  a  new  compulsory  insurance  act  has  been  passed 
and  the  Fourteenth  Amendment  of  the  Federal  Constitution  has 
not  been  invoked. 

On  the  other  hand,  some  of  the  States  have  brought  pressure  to 
bear  on  the  employers  voluntarily  to  adopt  compensation  schemes, 
and  this  they  have  done  by  weakening  their  defences  when  suit 
is  brought  against  the  employers.  This  pressure  is  the  result  of 
the  abolition  of  the  defences  found  in  the  doctrines  of  "fellow  serv- 
ant ",  "  assumption  of  risk  "  and  "  contributory  negligence  ".    (With 


236     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

respect  to  this  pressure,  see  the  article  "  Sequel  to  Workmen's  Com- 
pensation Acts  ",  by  Jeremiah  Smith,  Harvard  Law  Review,  January, 
1914,  especially  pp.  248-9).  But  are  these  defences  not  part  of  the 
institution  of  property?  The  courts  have  answered  "no".  The 
Supreme  Court  of  Massachusetts  expressed  this  view  July  24,  1911, 
in  reply  to  a  request  from  the  legislature  for  an  opinion:  "The 
rules  of  law  relating  to  contributory  negligence  and  assumption  of 
risk  and  the  effect  of  negligence  by  a  fellow  servant  were  established 
by  the  courts,  not  by  the  Constitution,  and  the  legislature  may 
change  them  or  do  away  with  them  altogether  as  defences"  (209 
Massachusetts  607). 


CHAPTER  VIII 

WHAT  MAY  I  OWN? 

The  theory  of  property  having  been  elaborated,  the 
question  now  is,  what  doctrine  concerning  ownership 
and  the  hmits  of  ownership  will  naturally  follow  from 
this  theory.  It  is  not  desired  to  give  any  opinion  in  the 
nature  of  an  exhortation,  nor  has  the  author  in  this 
place  a  desire  to  elaborate  any  speculations  of  his  own. 
The  present  aim  is  simply  to  show  what  naturally  and 
inevitably  follows  from  the  views  concerning  the  nature 
of  property  that  have  been  presented. 

There  can  be  no  doubt  that  people  at  the  present 
time  are  more  or  less  puzzled  concerning  ownership. 
Nearly  all  persons  whom  we  would  call  morally  normal 
fix  the  limit  somewhere,  some  too  closely,  but  most  of 
them  not  closely  enough.  We  meet  such  people  any 
day  in  any  community.  We  find,  for  example,  people 
who  will  not  own  land.  The  author  recalls  such  a  case: 
a  man  who  thought  land  ownership  was  ethically  not 
allowable  and  who  even  had  gone  out  of  his  way  to 
avoid  land  ownership  which  came  to  him  naturally 
and  would  have  brought  to  him  large  gain.  This  man, 
it  seemed  to  the  author,  carried  his  convictions  decidedly 
too  far;  but  most  people  are  not  sufficiently  sensitive 
in  regard  to  the  responsibilities  of  ownership.  This  is 
brought  out  by  the  opposition  to  any  proposal  to  affix 

237 


238     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  names  of  the  owners  to  the  pieces  of  property  which 
they  own  in  undesirable  sections  of  the  large  cities. 
There  is  a  strong  objection  on  the  part  of  owners  of  prop- 
erty in  the  slums  to  have  it  known  who  owns  the  prop- 
erty. ^ 

Now  following  the  theory  of  property  which  we  have 
discussed,  what  is  the  view  which  must  be  maintained 
concerning  ownership?  May  I  own  land  even  when  I 
think  that  public  ownership  of  land  is  better  than  pri- 
vate ownership?  Let  us  suppose  that  I  am  an  adherent 
of  municipal  gas  works.  Is  there  any  impropriety  in 
my  owning  stock  in  a  private  gas  plant?  We  have  come 
to  the  conclusion  that  private  property  is  a  social  trust; 
this  means  that  it  is  a  trust  from  society,  a  social  insti- 
tution, and,  inasmuch  as  it  has  been  established  by  so- 
ciety, an  individual,  as  an  individual,  cannot  change 
it.  We  must  make  use  of  external  valuable  things, 
which  must  be  under  some  form  of  control,  and  we  are 
responsible  as  members  of  society  and  not  as  individuals 
for  that  kind  of  control  which  the  institution  of  private 
property  carries  with  it.  The  individual  cannot  if  he 
would  change  the  institution  of  private  property  in 
land.  If  the  individual  thinks  that  some  other  form  of 
property  is  better,  or  that  there  ought  to  be  some  modi- 
fication in  the  institution  of  private  property  in  land,  he 
may  by  persuasion  endeavour  to  modify  and  direct 
the  opinion  of  his  fellows,  but  he  must  then  leave  it  to 
the  society  of  which  he  is  only  one  member  to  make  or 
not  to  make  this  change. 

But  something  more  is  to  be  said.  If  private  prop- 
erty is  a  social  trust,  has  the  individual  a  right  to  re- 


WHAT  MAY  I  OWN?  239 

fuse  that  trust?  Is  it  not  incumbent  upon  the  indi- 
vidual to  show  why  he  may  refuse  that  trust?  Let  us 
consider  the  case  of  the  man  who  went  out  of  his  way  to 
avoid  the  ownership  of  land.  Might  not  society  say  to 
him:  "Private  property  in  land  has  been  estabhshed  as 
a  social  trust;  accept  this  trust  and  use  it  for  the  in- 
terest of  society.  You  say  you  think  that  nationalisa- 
tion of  land  would  be  a  good  thing,  but  that  is  some- 
thing of  which  society  has  not  as  yet  become  convinced. 
In  the  meantime,  private  property  exists  and  it  involves 
a  trust,  not  only  a  privilege  but  an  obligation."  So  it 
would  seem  that,  from  his  own  point  of  view,  this  man 
should  try  to  extend  his  opinions  and  endeavour  to  per- 
suade society  to  adopt  his  views;  when  he  has  done  that, 
he  has  done  his  full  duty  in  that  matter.  If  he  refuses 
the  trust,  it  will  very  likely  fall  into  the  hands  of  less 
conscientious  persons  than  he  is,  who  would  not  make 
as  good  a  use  of  it  as  he  would  make. 

However,  if  such  a  person  feels  very  strongly  on  the 
subject  and  thinks  that  the  very  best  thing  which  could 
possibly  happen  to  society  would  be  the  nationalisa- 
tion of  land,  the  consistent  line  of  conduct  for  him  is 
to  own  the  land  and  to  take  any  gain  that  would  result 
from  the  ownership  of  the  land  and  use  it  for  spreading 
his  views.  It  was  said  during  one  campaign  that  Henry 
George  owned  land,  and  it  was  pointed  out  as  an  in- 
consistency. But  supposing  it  true  that  he  did  own 
land,  wherein  was  he  inconsistent  if  he  held  the  social 
view  of  private  property?  He  could  say,  "Until  society 
adopts  my  views  I  will  accept  the  trust  and  make  the 
best  use  of  it  that  I  can."   And  the  same  would  hold  with 


240     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

regard  to  private  ownership  of  gas  stock,  railway  stock, 
etc.  On  the  other  hand,  it  is  reprehensible  if  a  man  on 
account  of  his  private  interests  suppresses  his  own 
opinion  or  attempts  to  suppress  the  opinions  of  others; 
but  that  is  an  entirely  different  matter. 

We  have  here  to  do  simply  with  the  question  of  ex- 
pediency. Even  if  we  think  that  municipal  ownership 
of  gas  works  is  better  than  private  ownership,  we  must 
acknowledge  that  as  long  as  the  cities  of  the  country  do 
not  adopt  this  view  it  must  be  admitted  that  those  who 
have  supplied  a  real  need  through  private  gas  works 
have  conferred  a  benefit  upon  their  fellow  citizens. 
There  is  a  need  felt  for  the  light  they  furnish,  and  who- 
ever furnishes  this  light  is  entitled  to  remuneration  for 
his  services.  And  as  we  must  have  some  kind  of  regula- 
tion, either  through  public  or  private  property,  it  is 
simply  a  question  of  expediency.  What  is  best  for  the 
community?  Where  are  the  limitations?  We  want  gas, 
and  railway  service,  and  the  use  of  land.  They  must  be 
either  public  or  private  property. 

Are  there  then  no  ethical  limitations  upon  the  right 
of  ownership  which  flow  from  the  social  theory  of  prop- 
erty? Consider  the  case  of  gambling  hells  and  property 
used  for  gambling  purposes.  Now  can  a  person  whose 
views  are  ethically  sound,  and  who  tries  to  regulate  his 
conduct  by  ethical  considerations,  own  property  used 
for  gambling  purposes,  to  disgrace  and  degrade  his 
fellow  men?  Certainly  not.  Here  it  is  not  a  question 
of  expediency,  not  whether  we  shall  have  public  or  pri- 
vate ownership,  for  it  is  not  admitted  that  we  want  the 
thing  at  all.    So  a  person  who  attempts  to  govern  his 


WHAT  MAY  I  OWN?  241 

conduct  by  ethical  considerations   cannot  participate 
in  the  ownership  of  such  property.^ 

How  will  it  be  then  with  the  ownership  of  property 
in  which  intoxicating  beverages  are  sold?  That  will  de- 
pend, it  would  seem,  exactly  on  what  one  thinks  of  the 
liquor  traffic.  If  we  think  it  necessary  and  desirable, 
if  we  hold  that  all  that  is  needed  is  moderation  in  the 
use  of  alcoholic  beverages,  then  we  cannot  condemn  the 
person  who  owns  the  property  in  which  the  traffic  is 
carried  on.  But  if  we  say  that  the  liquor  traffic  is 
wrong,  that  it  works  evil  and  only  evil,  that  it  is  in  no 
sense  desirable,  then  we  must  condemn  the  ownership 
of  property  used  for  such  purposes.  But  we  might  in- 
deed come  to  the  conclusion,  that  we  should  be  governed 
according  to  the  circumstances  of  time  and  place.  In 
a  country  like  Germany  the  abolition  of  such  beverages 
is,  for  the  present  at  least,  absolutely  out  of  the  ques- 
tion. There  the  author  has  seen  a  board  of  foreign 
missions  meeting  in  a  beer  hall  to  discuss  their  work 
over  their  glasses  of  beer.  The  best  people  of  the  coun- 
try, generally  speaking,  use  intoxicating  beverages, 
and  it  would  not  be  considered  desirable  to  abohsh  the 
use  of  such  beverages.  It  is  quite  conceivable,  on  the 
other  hand,  that  in  South  Dakota  the  desirable  thing 
and  the  socially  expedient  thing,  would  be  the  entire 
abolition  of  the  traffic  in  intoxicating  beverages,  and 
one  would  have  to  reach  a  corresponding  conclusion 
concerning  the  ownership  of  property  connected  with 
the  traffic.  Much  depends  on  the  will  of  society: 
when  that  is  not  clear,  a  greater  load  is  thrown  on 
individual  judgment. 


242    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

We  have  here  to  do  with  strictly  economic  considera- 
tions. We  accept  the  current  ethical  views  of  leading 
thinkers  belonging  to  various  professions.  We  do  not 
ask  what  are  the  sanctions  and  fundamental  principles 
of  ethical  conduct,  but  we  inquire  into  certain  economic 
concepts  and  the  ethical  consequences  which  flow  from 
accepted  opinions. 

There  are  cases  which  seem  to  lie  between  the  two 
clear-cut  cases  of,  let  us  say,  agricultural  land  and  gamb- 
ling hells;  and  it  is  these  cases  which  puzzle  people, 
especially  that  of  traffic  in  intoxicating  beverages. 

And  here,  simply  by  the  way,  the  author  wishes  to 
make  another  suggestion.  A  traffic  like  that  in  intox- 
icating beverages  seems  to  have  various  effects  upon 
character,  according  to  the  circumstances  under  which 
it  is  conducted.  If  the  traffic  is  a  forbidden  one,  and 
the  best  people  in  the  community  regard  it  as  deserving 
of  moral  condemnation,  it  seems  to  have  a  degrading 
effect  upon  character.  On  the  other  hand,  in  a  country 
like  Germany,  it  might  not  be  easier  to  discover  any 
ethically  deleterious  effects  of  this  business  than  of  the 
shoe  or  dry-goods  business.  Many  sorts  of  traffic  have 
varying  effects  on  character,  according  to  the  circum- 
stances under  which  they  are  conducted. 

Take  another  illustration  of  this.  In  patriarchal 
times  slavery  had  a  very  different  effect  upon  character 
from  that  which  it  probably  would  have  to-day  in  a 
northern  community,  say  in  certain  sections  of  Wis- 
consin, if  the  circumstances  were  such  that  slavery 
could  be  developed  there.  It  would  certainly  be  under 
a  ban,  and  would  very  probably  have  a  disastrous  effect 


WHAT  MAY  I  OWN?  243 

upon  character.  But  how  different  the  case  of  slavery 
in  our  own  Southern  States  before  the  war!  Its  aboH- 
tion  has  never  anywhere  been  an  easy  matter.  The 
question  has  always  to  be  asked,  What  can  be  done  as 
an  alternative,  so  far  as  the  individual  is  concerned? 
Consider  the  case  of  the  individual  slave  owner  in  the 
ante-bellum  South.  Here  slavery  was  established  as 
an  institution,  permitted  by  the  country  as  a  whole, 
and  the  individual  as  such  could  not  abolish  the  insti- 
tution. He  could  emancipate  his  own  slaves  if  others 
had  no  property  claims  upon  him  which  made  this  im- 
possible; but  the  slave  owner  had  to  ask  himself,  "What 
will  be  the  effect  of  individual  emancipation?  "  And 
when  he  compared  the  condition  of  freed  slaves  with 
the  condition  of  these  who  were  not  free,  it  seemed  at 
least  open  to  question  whether  or  not,  so  long  as  the 
institution  existed,  one  did  better  to  retain  his  slaves 
and  treat  them  well,  or  to  emancipate  them.  Many 
conscientiously  held  the  belief  that  the  former  alterna- 
tive was  preferable;  and  it  was  quite  possible  to  hold 
it.  But,  if  any  slave  owner  undertook  to  prevent  a 
fair  discussion  of  the  question  and  thus  prevent  general 
emancipation,  that  would  be  a  different  matter,  because 
that  would  raise  a  question  concerning  the  ethical 
character  of  the  institution  as  a  whole  and  not  of  an 
individual  case  only.  The  author  here  is  simply  trying 
to  point  out  the  difference  between  what  an  individual 
may  ethically  do  when  he  has  no  control  over  a  social 
institution  and  what  he  ought  to  do  providing  the  social 
institution  itself  were  under  his  control. 

Let  us  take  another  case.    This  is  not  a  very  serious 


244     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

one,  but  after  all  it  is  brought  forward  in  newspapers. 
Some  one  says  to  me :  ' '  You  call  property  a  social  trust. 
You  have  ten  thousand  dollars  and  I  have  none.  I 
want  you  to  divide  with  me."  But  it  goes  without  say- 
ing that  it  does  not  follow  from  the  doctrine  of  property 
which  we  have  laid  down,  that  a  man  who  has  ten 
thousand  dollars  should  give  even  a  cent  to  the  man  who 
has  none.  For  whatever  the  sum  may  be  that  he  has, 
so  long  as  it  is  in  his  hands,  it  is  a  trust  from  society, 
and  I  cannot  say  to  him,  ''Now  you  must  divide  with 
me."  I  must  show  him  that  when  he  divides  with  me 
he  is  promoting  the  social  weal  and  discharging  his  trust; 
he  must  be  convinced  before  dividing  with  me  that  in 
so  doing  he  is  making  a  better  use  of  his  property  than 
any  other  use  he  could  make  of  it.  The  very  fact  that  I 
am  so  impertinent  as  to  suggest  the  question,  suggests 
also  the  negative  answer. 

Another  question  has  been  raised.  In  the  case  of 
land  ownership,  for  instance,  will  not  my  example 
count  for  more  if  I  abstain  from  ownership  in  case  I  hold 
views  like  those  of  Henry  George?  Henry  George  might 
have  said  that  people  would  misunderstand  him,  and  on 
account  of  the  weakness  of  his  brethren  he  would  not 
put  a  stumbling  block  in  their  way.  But  to  what  ex- 
tent one  should  yield  to  the  weaknesses  of  one's  fellow 
men  is  an  entirely  different  question.  In  the  case  of 
a  great  leader  like  Henry  George,  it  would  perhaps  be 
better  for  the  sake  of  his  influence  that  he  abstain  from 
land  ownership,  not  because  there  would  be  any  in- 
consistency in  ownership,  but  because  it  might  not  be 
an  expedient  thing  on  account  of  the  misapprehension  to 


WHAT  MAY  I  OWN?  245 

which  it  would  give  rise.  The  objective  soundness  of 
his  views  is  not  considered  at  all  in  this  connection. 

Not  long  ago  the  question  of  ''tainted  money"  was 
much  discussed  in  the  United  States.  Many  held  it 
contrary  to  sound  ethics  to  take  for  religious  and  phil- 
anthropic purposes  money  which  had  been  acquired 
by  notoriously  unworthy  methods.  The  real  question 
at  issue  was  whether  acceptance  of  the  money  implied 
an  endorsement  of  unethical  practices  and  encouraged 
their  continuance,  a  question  of  a  concrete  kind  which 
could  be  solved  in  each  case  only  by  a  knowledge  of  the 
conditions,  individual  and  social,  of  time  and  place. 
Generally  speaking,  what  is  desired  is  a  beneficial  use 
of  wealth  and  a  burden  of  proof  would  seem  to  rest  upon 
those  who  oppose  such  a  use  on  account  of  the  indirect 
consequences  of  the  acceptance  of  gifts.  If  money  has 
been  badly  acquired,  and  wrongs  committed  cannot  be 
specifically  remedied,  the  natural  thought  is  that  the 
money  should  be  put  to  some  good  use  at  the  earliest 
possible  moment.  But  there  may  be  critical  occasions 
when  wealth  is  given  as  a  bribe  to  secure  immunity 
from  public  condemnation  or  to  win  public  favour  for 
socially  unworthy  conduct,  and  in  such  cases  the  re- 
jection of  gifts  is  required  by  sound  ethics.  But  into 
this  problem  we  need  not  now  further  enter.  ^ 

Now  from  all  this  the  author  formulates  what  he 
will  call  the  ethical  law  of  ownership:  When  the  service 
or  commodity  furnished  is  socially  desirable,  and  espe- 
cially when  it  is  clearly  and  generally  recognised  as  such, 
private  property  in  the  goods  connected  with  the  traffic  or 
business  is  ethically  permissible  if  legally  allowed. 


246     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

When  the  service  or  commodity  furnished  is  socially 
injurious,  and  especially  if  it  is  clearly  and  generally 
recognised  as  such,  private  property  in  the  goods  connected 
with  the  traffic  or  business  is  reprehensible  whether  legally 
allowed  or  not. 


Notes  and  References  to  Chapter  VIII 

^  P.  238.  In  the  summer  of  1912  the  author  noticed  in  Dresden 
in  the  large  main  hall  of  a  house  with  several  apartments  a  tablet, 
conspicuously  posted,  with  the  name  and  address  of  the  owner. 
This  appears  to  be  a  common  practice  in  Germany  and  is  to  be 
recommended  as  attaching  responsibility  to  ownership.  On  the 
other  hand,  a  German  professor,  when  a  few  years  ago  conducting 
investigations  in  the  slums  of  London,  was  frequently  unable  to 
ascertain  the  ownership  of  specific  pieces  of  property.  When  he 
inquired  of  the  superintendent  or  caretaker,  he  was  several  times 
told  that  the  owner's  name  could  not  be  divulged  as  that  was  a 
confidential  matter. 

There  are  a  good  many  people,  some  of  prominence,  who  ad- 
vocate making  the  owner  of  property  used  for  gambling,  etc., 
legally  liable  for  the  misdeeds  committed  in  or  on  his  property, 
and  it  is  said  that  bills  have  been  introduced  into  various  legislatures 
making  the  owner  of  houses  liable  if  he  rent  his  property  for  illegal 
purposes.  It  may  be  questioned  whether  this  is  not  going  beyond 
what  can  be  demanded  either  by  economics  or  ethics,  as  the  owner 
cannot  have  a  power  which  would  be  commensurate  with  his  re- 
sponsibility. But  the  owner  may  rightfully  be  called  upon  to  ac- 
knowledge plainly  his  ownership. 

2  P.  241.  From  a  strictly  legal  point  of  view,  it  may  be  said  that 
the  discussion  at  this  point  turns  rather  on  the  proper  permissive 
use  than  the  right  to  own.  If  the  use  can  be  changed  to  a  proper 
one,  no  ethical  objection  is  to  be  urged  against  ownership. 

'  P.  245.  This  question  has  been  treated  in  a  different  medium  by 
Bernard  Shaw  in  his  plays,  Mrs.  Warren's  Profession  and  Major 
Barbara. 


247 


CHAPTER  IX 

THE  CONSERVATIVE  NATURE  OF  THE  SOCIAL  THEORY  OP 

PROPERTY 

It  may  be  said  safely  that  the  theory  of  property 
which  has  been  presented  will  seem  to  some  startlingly 
radical.  But  first  appearances  are  often  deceptive. 
The  truth  is  that  this  theory  gives  us  a  firm  foundation 
for  private  property,  in  fact  a  very  bulwark  of  private 
property.  Let  us  examine  some  of  the  conclusions  to 
which  the  social  theory  of  property  leads. 

First,  it  leads  to  a  conservative  view  of  the  state. 
If  this  theory  is  true,  it  gives  us  at  least  a  utilitarian 
basis  for  the  state,  because  it  determines  in  this  respect 
what  conduct  is  for  the  general  welfare. 

But  the  social  theory  of  property  leads  naturally  to 
what  we  may  call  the  historical  theory  of  the  state,  a 
theory  which  has  been  held  by  great  leaders  of  thought 
in  all  ages  and  in  all  lands,  and  which  alone  has  stood 
the  test  of  examination  by  wise  men  and  the  reflection 
of  philosophers  for  generations.  It  is  a  continuous 
growth  and  as  such  it  corresponds  to  essential  human 
needs.    This  in  itself  gives  it  an  ethical  character. 

Again,  notice  that  the  state  determines  the  character 
of  conduct  in  certain  very  important  economic  particu- 
lars; that  which  determines  the  character  of  conduct 
must  itself  be  ethical.    It  is  thus  difficult  to  see  any  es- 

248 


CONSERVATIVE  VIEW  OF  PROPERTY  249 

cape  from  the  view  that  the  state  is  an  ethical  person, 
provided  the  social  theory  of  property  is  correct.  And 
the  view  that  the  state  is  an  ethical  person  is  in  its 
general  influence  a  conservative  one,  militating  against 
anything  like  revolution  and  anarchism.  Control  over 
our  lives  and  our  property  rests  with  the  state,  and  such 
control  cannot  proceed  from  contract:  for  how  can  an 
agreement  between  private  individuals  establish  ethical 
rules  in  a  community?  There  must  be  something  be- 
hind contract.  In  fact,  contract  cannot  exist  apart 
from  the  state.  Agreements  may  exist,  but  contracts 
presuppose  the  existence  of  the  state.  ^  In  fact  we  may 
safely  speak  of  the  contract  theory  of  the  state  as  some- 
thing which  is  relegated  to  the  rubbish  heap  of  past 
theories. 

Some  readers,  and  especially  those  trained  in  Greek 
thought  and  German  philosophy,  will  at  this  point 
naturally  recall  the  view  that  the  state  in  its  idea  and 
essence  is  a  divine  institution,  however  unworthy  may 
be  the  men  who  at  particular  times  and  places  gain  in 
it  positions  of  influence  and  control.  Other  readers 
will  look  upon  such  a  theory  as  the  outcome  of  a  mis- 
leading idealism  and  still  others  will  fear  that  it  carries 
with  it  a  false  organismic  idea  of  the  state  and  society. 
The  author  cannot  now  and  here  enter  into  an  exhaust- 
ive discussion  of  these  different  views,  for  which  space 
is  too  limited.  But  whatever  theory  of  the  state  is 
adopted,  the  weighty  responsibilities  which  devolve 
upon  all  who  direct  and  shape  its  various  activities  re- 
ceive new  emphasis  when  it  is  perceived  that  the  state 
determines  such  important  rules  of  conduct  as  those 


250     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

which  are  necessarily  involved  in  the  laws  of  property. 
Even  if  the  state  is  a  mere  aggregation  of  individuals — 
in  the  opinion  of  the  author  an  entirely  unscientific 
view — it  becomes  apparent  that  the  phrase  ''sacredness 
of  the  ballot "  is  vital  and  full  of  meaning;  and  rehgiously 
disposed  people  will  feel  like  commending  anew  the  old 
American  custom  of  ''election  sermons",  in  which 
preachers  laid  it  upon  the  consciences  of  their  flocks, 
that  all  the  tasks,  obligations  and  privileges  of  citizen- 
ship were  of  a  solemn  character. 

Thus,  without  going  further  into  the  nature  of  the 
state,  we  may  sum  up  these  considerations  by  saying 
that  the  social  theory  of  property  is  a  conservative  one 
inasmuch  as  it  leads  to  a  conservative  view  of  the  state. 

And  in  the  second  place,  it  is  a  conservative  theory 
because  it  renders  the  institution  of  property  a  flexible 
one  which  can  be  bent  and  shaped  to  meet  the  exigencies 
of  the  social  situation.  If  the  institution  is  simply  one 
and  indivisible,  then  it  cannot  be  bent,  it  is  inflexible, 
and  we  have  either  to  accept  it  just  as  it  is  or  reject  it, 
there  being  no  middle  ground.  We  might  infer  from 
many  utterances  of  the  press  at  the  present  time,  and 
even  from  some  expressions  by  more  thoughtful  persons, 
that  the  institution  is  one  and  indivisible,  and  inflexible. 
Consider  this  quotation,  for  example,  "The  person  who 
clings  with  a  sense  of  possession  to  the  smallest  coin  in  his 
pocket  has  voluntarily  given  adhesion  to  one  of  the  great 
institutions  of  our  present  civilization."  ^  Anyone  who 
clings  to  any  article  of  property  he  may  have  gives  ad- 
hesion, it  is  said,  to  the  institution  of  property.  That 
may  be  true,  but  it  does  not  follow  therefrom  that  he 


CONSERVATIVE  VIEW  OF  PROPERTY       251 

gives  consent  to  all  that  the  institution  of  property  car- 
ries with  it  at  the  present  time;  for  the  institution  of 
property  is  not  eternal  and  unchangeable,  like  the  granite 
of  the  mountains.  It  is  true  that  we  all  hang  together, 
and  that  you  cannot  attack  the  millionaire's  palace, 
without  threatening  the  widow's  cottage.  If  you  attack 
the  millionaire's  palace  you  make  an  attack  upon  the  in- 
stitution of  property — using  the  word  attack  in  a  strict 
sense — but  it  does  not  follow  that  we  cannot  modify  the 
institution  so  as  to  lead  to  a  modification  in  the  distribu- 
tion of  wealth,  without  injuring  the  widow's  cottage.  It 
does  not  follow  because  the  millionaire  pays  a  tax  of  three 
per  cent,  and  the  widow  pays  a  one  per  cent,  tax  that  the 
institution  of  property  is  threatened  by  this  progressive 
taxation.  Neither  the  widow's  cottage  is  necessarily 
threatened  thereby  nor  the  millionaire's  palace. 

In  the  third  place,  the  social  theory  of  property  is  a 
conservative  one  because  the  institution  finds  its  limi- 
tations in  the  social  welfare. 

And  first  of  all,  note  the  conservative  influence  which 
this  theory  of  property  had  upon  John  Stuart  Mill.  He 
said: 

"If,  therefore,  the  choice  were  to  be  made  between  Com- 
munism with  all  its  chances,  and  the  present  state  of  society 
with  all  its  suffering  and  injustices;  if  the  institution  of  pri- 
vate property  necessarily  carries  with  it  as  a  consequence 
that  the  produce  of  labour  should  be  apportioned  as  we  now 
see  it,  almost  in  an  inverse  ratio  to  the  labour— the  largest 
portions  to  those  who  have  never  worked  at  all,  the  next 
largest  to  those  whose  work  is  almost  nominal,  and  so  in  a 
descending  scale,  the  remuneration  dwindling  as  the  work 
grows  harder  and  more  disagreeable  until  the  most  fatiguing 


252    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  exhausting  bodily  labour  cannot  count  with  certainty 
on  being  able  to  earn  even  the  necessaries  of  life;  if  this  or 
Communism  were  the  alternative,  all  the  difficulties,  great 
or  small,  of  Communism  would  be  as  dust  in  the  balance. 
But  to  make  the  comparison  applicable,  we  must  compare 
Communism  at  its  best,  with  the  regime  of  individual  prop- 
erty, not  as  it  is,  but  as  it  might  be  made.  The  principle 
of  private  property  has  never  yet  had  a  fair  trial  in  any 
country.  .  .  .  They  have  made  property  of  things  which 
never  ought  to  be  property,  and  absolute  property  where 
only  a  qualified  property  ought  to  exist."  ^ 

But  because  he  did  not  hold  that  view,  but  did  hold 
the  view  that  it  found  its  limitations  in  the  social  wel- 
fare, he  said,  for  the  present  at  any  rate  he  would  hold  to 
the  institution  of  private  property. 

Now  take  this  view  of  property  in  connection  with 
certain  arguments  concerning  land,  advanced  by  fol- 
lowers of  Henry  George  and  other  men  of  a  similar  way 
of  thinking.  Sometimes  a  case  like  this  is  brought  for- 
ward. Let  us  suppose  that  on  a  certain  island,  which 
is  not  connected  with  any  other  land,  there  are  a  great 
many  people,  and  gradually  all  the  land  on  the  island 
is  acquired  by  one  property  owner.  What  does  the 
right  of  private  property  carry  with  it  in  such  a  case? 
Among  other  things  property  normally  carries  with  it  the 
right  of  eviction.  There  is  no  other  land  to  which  the 
people  can  escape,  and  they  will  be  drowned  in  the  depths 
of  the  sea.     We  use  Henry  George's  own  language: 

"And  to  this  manifest  absurdity  does  the  recognition 
of  the  individual  right  to  land  come  when  carried  to  its 
ultimate — that  any  one  human  being,  could  he  concentrate 
in  himself  the  individual  rights  to  the  land  of  any  country, 


CONSERVATIVE  VIEW  OF  PROPERTY  253 

could  expel  therefrom  all  the  rest  of  its  inhabitants,  and  could 
he  thus  concentrate  the  individual  rights  to  the  whole  sur- 
face of  the  globe,  he  alone  of  all  the  teeming  population  of 
the  earth  would  have  the  right  to  live."  ^ 

This  state  of  things  would  follow  acceptance  of  a 
view  of  private  property  which  made  it  an  indivisible, 
unchangeable  institution.  But  if  private  property 
finds  its  limitations  in  the  social  well-being,  then  such 
a  land  owner  may  not  drive  people  ofT  his  property  to 
betake  themselves  to  the  sea  and  perish  in  the  waves, 
because  long  before  that  point  is  reached  private  prop- 
erty will  find  its  limitations,  since  society  cannot  think 
that  its  welfare  will  be  found  in  its  own  destruction. 
It  is  only  a  narrow  and  cast-iron  view  of  property  which 
will  admit  of  such  an  argument.  In  fact,  conservative 
writers  in  the  Roman  Catholic  Church  have  based  their 
defence  of  landed  property  upon  the  social  view.  Ref- 
erence may  be  made  to  a  work  called  Champions  of 
Agrarian  Socialism,  written  by  Rev.  Victor  Cathrein, 
S.  J.,  and  also  to  a  brochure,  entitled  Henry  George  and 
Private  Property,  by  Professor  John  A.  Ryan  of  St.  Paul 
Seminary,  Minnesota.  Cathrein  says  in  the  work  re- 
ferred to :  ■'' 

"Property  in  the  objective  sense,  or  objects  of  full  owner- 
ship, are  only  external  material  things.  Hence  it  is  that 
nearly  all  the  older  expounders  of  the  Jus  Romanum  and 
many  theologians  also  define  ownership  as  the  'right  of 
fully  disposing  of  a  material  object  within  legal  bounds.' 
From  this  clause  'within  legal  bounds'  it  is  manifest  that 
the  Justinian  Code  also  never  knew  an  absolutely  unrestricted 
right  of  property.  Not  only  was  the  subordination  of  human 
proprietorship  to  the  supreme  dominium  of  God  never  ques- 


254     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

tioned  in  the  Christian  Roman  right,  but  the  principle  was 
universally  acknowledged  that  positive  law  according  to  the 
necessary  demands  of  the  public  weal,  could  restrict  the  valid 
as  well  as  the  licit  use  of  private  property,  especially  in  land. 
Proof  of  this  are  the  so-called  legal  servitudes  which  for  the 
sake  of  public  interest  limited  in  many  ways  the  free  disposal 
of  landed  property." 

Father  Ryan,  in  his  brochure,  issued  in  1912,  similarly 
says:  "In  answer  to  George's  argument  and  illustration  we 
say,  first,  that  the  right  of  ownership  created  by  first  occu- 
pancy is  not  unlimited  either  in  power  or  in  extent;  and,  sec- 
ond, that  the  injustice  resulting  from  private  landownership  in 
practice  has  in  very  few  instances  been  due  to  first  occupation 
of  excessively  large  tracts  of  land.  The  right  to  appropriate 
land  that  no  one  else  has  yet  claimed  does  not  include  the 
right  to  take  a  whole  region  or  continent,  so  that  all  subse- 
quent arrivals  are  obliged  to  become  tenants  of  the  first. 
There  seems  to  be  no  good  reason  why  the  first  occupant  is 
justified  in  claiming  as  his  own  more  than  he  can  cultivate 
by  his  own  labour,  or  with  the  assistance  of  those  who  are 
under  contract  to  labour  for  him,  or  who  prefer  to  be  his 
tenants  or  his  employees  rather  than  independent  proprietors. 
Neither  is  the  right  of  private  landownership  unlimited  in  its 
powers  or  comprehension.  Even  though  a  man  should  have 
become  the  rightful  owner  of  all  the  land  in  a  neighbourhood, 
he  would  have  no  moral  right  to  exclude  from  its  use  persons 
who  could  not  without  extreme  inconvenience  find  a  living 
elsewhere.  He  would  be  obliged  to  let  them  cultivate  it 
in  return  for  a  fair  rental.  The  Christian  conception  of  the 
limitations  of  private  ownership  as  to  its  comprehension,  is 
practically  illustrated  in  the  action  of  Pope  Clement  IV., 
who  permitted  strangers  to  use  the  third  part  of  any  estate 
which  the  proprietor  refused  to  cultivate  himself."  ^ 

It  is  precisely  this  social  theory  of  property  which  is 
advanced  in  the  quotations  in  opposition  to  what  rightly 


CONSERVATIVE  VIEW  OF  PROPERTY  255 

or  wrongly  is  called  by  Cathrein  "agrarian  socialism  ". 
And  it  is  as  true  of  the  English  law  as  of  the  Jus  Ro- 
manum  that  it  has  never  known  an  unrestricted  right  of 
property.  The  following  quotation  from  Mr.  Justice 
Alexander  A.  Bruce  brings  out  this  point  clearly  and 
accurately : 

"The  constitutions,  State  and  federal,  do  not  anywhere 
guarantee  any  absolute  property  rights  nor  right  to  liberty. 
The  guarantee  is  merely  that  no  person  shall  be  deprived  of 
life,  liberty  and  property  without  due  process  of  law.  The 
right  to  liberty  and  property  was  never  absolute  under  the 
English  law,  and  the  American  constitutions  have  never  been 
construed  as  going  further  than  guaranteeing  the  continuance 
of  the  rights  which  existed  at  the  time  of  their  adoption."  ^ 

Henry  George,  curiously  enough,  rejects  the  right  to 
tax  private  property,  and  we  see  again  the  radical  nature 
of  his  doctrine  in  a  different  direction.  If  property  is 
something  absolute,  it  is  difficult  to  find  any  justifica- 
tion of  the  right  of  taxation,  because,  look  at  this  as  one 
will,  it  does  mean  a  development  of  the  social  side  of 
private  property.  The  right  of  taxation  does  mean  a 
limitation  of  the  right  of  private  property,  and  a  claim 
on  the  part  of  the  general  public  grounded  in  the  social 
side  of  the  institution.  And  thus  this  absolute  view  of 
property  held  by  Mr.  George,  which  leads  him  to  reject 
private  property  in  land,  also  leads  him  to  reject  tax- 
ation. Both,  he  says,  are  robbery;  for  he  claims  that 
land  belongs  to  society  or  to  the  individual  absolutely; 
as,  then,  it  cannot  belong  to  the  individual  absolutely, 
it  must  belong  to  society  so  far  as  the  unearned  value 
is  concerned.    Other  kinds  of  property  that  I  own,  the 


256     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

house  that  I  have,  the  money  that  I  have  belong  to  me 
absolutely,  and  as  they  belong  to  me  absolutely  there 
is  no  such  thing  as  any  right  of  taxation;  and  when  the 
tax  collector  comes  and  I  yield  to  the  superior  force 
which  is  back  of  him,  I  am  robbed.^ 

In  the  fourth  place,  the  view  of  property  which  has 
been  advanced  is  a  conservative  view  because  it  pro- 
tects private  property  in  its  true  sphere.  To  place  re- 
strictions on  an  unjust  or  injurious  sort  of  property  does 
not  endanger  private  property  as  a  whole.  If  private 
property  is  a  unit,  then  every  unjust  use  of  property  en- 
dangers the  institution  as  a  whole.  The  question  which 
has  really  to  be  asked  is  whether  a  particular  unjust  use 
of  property  or  an  injurious  sort  of  property  is  any  neces- 
sary part  of  the  institution  of  property. 

The  abuse  of  the  idea  of  private  property  has  been 
injurious  in  the  past,  and  has  to  a  certain  extent  en- 
dangered property.  There  was  a  time  when  even  sover- 
eignty was  regarded  as  private  property.  "Territorial 
sovereignty  was  regarded  as  the  hereditary  property  of 
a  family."  ^  And  to  some  the  institution  of  property 
doubtless  seemed  to  stand  or  fall  with  the  idea  of  prop- 
erty in  sovereignty.  The  state,  so  far  as  it  was  sovereign, 
belonged  to  the  reigning  family,  it  was  thought.  Many 
held  this  idea  in  mediaeval  times,  and  they  may  have 
said,  "If  you  give  up  this  idea  you  endanger  the  whole 
idea  of  property."  But  it  has  been  given  up.  Sov- 
ereignty is  no  longer  anything  but  a  social  trust.  And 
private  property  has  been  strengthened  by  this  change.  ^° 

So  also  with  slavery.  It  was  said  that  if  slavery  was 
abolished  the  institution  of  property  itself  would  be 


CONSERVATIVE  VIEW  OF  PROPERTY  257 

endangered,  and  that  those  who  attacked  slavery  were 
revolutionists.  But  slavery  has  disappeared,  and  the 
institution  of  property  is  stronger  even  than  it  was,  be- 
cause that  abuse  of  the  idea  has  disappeared.^^  In  the 
future,  other  rights  will  be  changed.  And  as  they  are 
changed,  as  property  rights  correspond  more  closely  to 
the  demands  of  society  and  more  truly  promote  the 
social  weal,  the  institution  of  property  will  be  strength- 
ened. 

Unless  it  comes  to  such  a  pass  that  the  institution  in 
its  very  essence  is  injurious,  there  can  be  no  ground  for 
a  general  attack  on  private  property.  Invasion  of  the 
rights  of  private  property  appears  the  more  unjusti- 
fiable if  provision  is  made  for  the  needs  of  the  general 
public. 

It  may  be  true  that  private  property  is  safer  in  any 
part  of  the  world  in  so  far  as  the  institution  itself  con- 
forms to  the  social  theory  of  property.  Germany  is  a 
country  which  in  some  respects  carries  far  this  recogni- 
tion of  the  social  theory  of  property;  but,  on  the  whole, 
private  property  rights  are  probably  better  respected 
and  protected  there  than  elsewhere.  There  seems  to  be 
more  hesitation,  for  example,  about  trespassing  upon 
its  rights  there  than  in  iVmerica,^-  where  private  prop- 
erty is  by  no  means  always  sufficiently  respected.  This 
is  seen,  for  example,  in  the  neighbourhood  of  many 
large  American  cities  where  it  is  impossible  to  raise 
fruit,  vegetables,  etc.,  because  they  are  so  often  stolen 
almost  under  the  owner's  very  eyes,  so  that  some  simply 
abandon  the  effort  to  use  their  land  in  this  way. 

But  when  provision  is  made  for  all  true  social  needs, 


258     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

then  we  can  accompany  such  provision  with  a  stricter 
enforcement  of  the  rights  of  private  property.  For 
instance,  if  there  are  no  pubhc  playgrounds,  there  is  a 
strong  temptation  to  trespass  upon  private  property. 
Playgrounds  supply  a  need  felt  in  every  community. 
The  children  must  have  playgrounds,  the  boys  want 
fields  for  their  games,  and  people  want  pleasure-grounds 
through  which  they  can  stroll;  if  provision  is  not  made 
in  public  property  for  the  satisfaction  of  these  needs, 
then  there  is  a  continual  temptation  to  trespass  upon 
private  property.  More  public  property  would  be  a 
protection  to  private  property  in  most  countries,  per- 
haps in  all. 

The  question  may  also  be  asked  whether  the  failure 
to  make  private  property  conform  to  the  social  theory 
of  property  has  not  been  one  of  the  causes  of  the  down- 
fall of  the  older  civilisations.  Was  not  that  the  case 
with  Rome?  Consider  the  decline  and  fall  of  the  Roman 
Empire.  Private  property  was,  in  part  at  least,  the 
cause,  on  the  one  hand,  of  poverty  and  want,  and  on 
the  other  hand,  of  wanton  luxury  and  moral  degrada- 
tion. But  when  things  came  to  that  pass  in  Rome,  "the 
remedy  for  the  disease  was  even  more  dreaded  than  the 
disease  itself."  ^^ 


Notes  and  References  to  Chapter  IX 

'  P.  249.  This  receives  further  treatment  in  Part  II  of  the  present 
work.  See  some  illuminating  observations  on  this  subject  in  Adam 
Smith's  Lectures,  ed.  Cannan,  pp.  11-13. 

2  P.  250.  See  the  article  in  the  International  Journal  of  Ethics 
of  October  1893,  entitled  ''What  Justifies  Private  Property?"  by 
W.  L.  Sheldon. 

*  P.  252.  Mill,  Principles  of  Political  Economy, Bk.  II,  Chap.  I,  §  3. 

*  P.  253.  Henry  George,  Progress  and  Poverty,  Bk.  VII,  Chap.  I, 
p.  310. 

5  P.  253.  Translated,  revised,  and  enlarged  by  Rev.  J.  N.  Heinzle, 
S.  J.,  President  of  Canisius  College,  Buffalo,  N.  Y.  The  quotation 
is  found  on  p.  99. 

^  P.  254.  John  A.  Ryan,  Henry  George  and  Private  Property, 
pp.  4-5. 

'P.  255.  "The  Anthracite  Coal  Industry  and  the  Business  af- 
fected with  a  Public  Interest,"  article  in  the  Michigan  Law  Review  of 
June  1909.  Read  especially  pp.  627-635.  Mr.  Justice  Bruce  in  this 
article  develops  the  idea  of  "  property  affected  with  a  public  interest" 
which  means  social  regulation  where  the  public  welfare  requires  it 
and  it  must  be  remembered  that  day  by  day  an  increasing  mass  of 
property  is  recognised  by  the  judiciary  as  being  clothed  with  a 
public  interest.  This  means  necessarily  the  social  theory  of  prop- 
erty as  it  has  been  developed  under  the  American  constitutional 
system.  The  following  citations  of  cases  are  given:  Munn  v.  Illinois, 
94  U.  S.  113;  Lake  View  v.  Rose  Hill  Cemetery,  70  111.  192;  Allnut  v. 
Inglis,  12  East  527;  Brewster  v.  Miller,  101  Ky.  275;  Hurley  v.  Hud- 
dingfield,  156  Ind.  416;  Gould  v.  Electric  Light  Company,  CO  N.  Y. 
Su])p.  559;  Canada  Railway  v.  International  Bridge  Company,  8 
App.  Cas.  723;  State  v.  Telephone  Company,  17  Neb.  126;  Haugen  v. 
Albina  Water  Company,  21  Ore.  Ill;  City  of  Tampa  v.  Waterworks 
Company,  34  South.  631;  Mobile  v.  Water  Supply  Company,  130 
Ala.  379;  Wheeler  v.  Irrigation  Company,  10  Col.  582;  People  v. 
Budd,  117  N.  Y.  1;  State  v.  Brass,  2  N.  D.  482;  Brass  v.  North 
Dakota,  153  U.  S.  391,  14  Sup.  Ct.  857;  Peel  Splint  Coal  Co.  v. 

259 


260     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

State,  36  W.  Va.  802;  Harbison  v.  Knoxville  Iron  Co.,  103  Tenn.  421; 
Knoxville  Iron  Co.  v.  Harbison,  183  U.  S.  13,  22  Sup.  Ct.  1 ;  Dayton 
Coal  Co.  V.  Barton,  183  U.  S.  23, 22  Sup.  Ct.  5. 

« P.  256.  See  his  work  A  Perplexed  Philosopher,  where  he  makes 
the  following  statement: 

"The  truth  is  that  customs  taxes,  and  improvement  taxes,  and 
income  taxes,  and  taxes  on  business  and  occupations  and  on  legacies 
and  successions,  are  morally  and  economically  no  better  than  high- 
way robl^ery  or  burglary,  all  the  more  disastrous  and  demoralising 
because  practised  by  the  state.  There  is  no  necessity  for  them. 
The  seeming  necessity  arises  only  from  the  failure  of  the  state 
to  take  its  own  natural  and  adequate  source  of  revenue — a  failure 
which  entails  a  long  train  of  evils  of  another  kind  by  stimulating  a 
forestalling  and  monopolisation  of  land  which  creates  an  artificial 
scarcity  of  the  primary  element  of  life  and  labor,  so  that  in  the 
midst  of  the  illimitable  natural  resources  the  opportunity  to  work 
has  come  to  be  looked  upon  as  a  boon,  and  in  spite  of  the  most 
enomious  increase  in  the  powers  of  production  the  great  mass 
find  life  a  hard  struggle  to  maintain  fife,  and  millions  die  before 
their  time,  of  overstrain  and  undemurture."    (p.  243.) 

In  his  Progress  and  Poverty  Henry  George  expresses  himself  thus: 

"Nature  gives  to  labor;  and  to  labor  alone.  In  a  very  Garden 
of  Eden  a  man  would  starve  but  for  human  exertions.  Now  here 
are  two  men  of  equal  incomes— that  of  the  one  derived  from  the 
exertion  of  his  labor,  that  of  the  other  from  the  rent  of  land.  Is 
it  just  that  they  should  equally  contribute  to  the  expenses  of  the 
state?  Evidently  not.  The  income  of  the  one  represents  wealth 
he  creates  and  adds  to  the  general  wealth  of  the  state;  the  income 
of  the  other  represents  merely  wealth  that  he  takes  from  the  general 
stock,  returning  nothing.  The  right  of  the  one  to  the  enjoyment 
of  his  income  rests  on  the  warrant  of  nature,  which  returns  wealth 
to  labor;  the  right  of  the  other  to  the  enjojTnent  of  his  income  is  a 
mere  fictitious  right,  the  creation  of  municipal  regulation,  which  is 
unknown  and  unrecognized  by  nature.  The  father  who  is  told  that 
from  his  labor  he  must  support  his  children,  must  acquiesce,  for 
such  is  the  natural  decree;  but  he  may  justly  demand  that  from  the 
income  gained  by  his  labor  not  one  penny  shall  be  taken,  so  long  as 
a  penny  remains  on  incomes  which  are  gained  by  a  monopoly  of  the 
natural  opportunities  which  Nature  offers  impartially  to  all,  and  in 


CONSERVATIVE  VIEW  OF  PROPERTY  261 

which  his  children  have  as  their  birth-right  an  equal  share."  (pp. 
376-377). 

But  Henry  George  and  his  followers  have  frequently  expressed 
themselves  far  more  strongly  and  have  made  a  clear-cut  distinction 
between  rent  as  public  property,  which  camiot  be  taken  for  private 
purposes  without  robbery,  and  all  other  mcome  wliich,  being  the 
result  of  labour  and  effort  belongs,  they  allege,  to  the  category  of 
absolute  private  property,  of  which  the  o\vner  cannot  be  deprived 
without  robbery.  The  position  has  also  been  taken  by  single 
taxers  that  the  government  must  be  supported  by  the  single  tax, 
and  that  no  other  tax  may  be  levied.  It  is  said  government  must 
be  content  with  its  own  income  and  adjust  itself  to  that  income 
like  private  individuals,  and  in  the  early  days  of  the  single  tax 
agitation  in  the  United  States  a  great  deal  of  attention  was  given  to 
showing  the  adequacy  of  land  rents  for  all  public  purposes.  Expres- 
sions like  these  can  be  found  frequently  enough  in  the  periodical 
and  pamplilet  literature  devoted  to  the  single  tax.  In  his  Progress 
and  Poverty  and  in  his  posthumous  work  The  Science  of  Political 
Economy,  Henry  George  expresses  himself  generally  with  more  cau- 
tion. Also  some  of  his  more  recent  followers  are  more  careful  and 
guarded,  and  in  the  second  passage  quoted  above  the  reservation 
is  made  that  what  man  produces  should  not  be  taken  from  him  for 
public  purposes  "as  long  as  there  is  any  public  property  that  might 
be  employed  for  that  purpose."  In  the  quotation  given  from  Prog- 
ress and  Poverty  a  similar  reservation  is  made.  But  he  would  allege 
spoliation,  inasmuch  as  in  his  opinion  the  rent  of  land  is  ample. 
This  subject  is  briefly  discussed  from  the  point  of  view,  first,  of 
social  reform  and,  second,  of  public  finance  in  Outlines  of  Economics 
(revised  ed.  by  Ely,  Adams,  Lorenz,  and  Young)  on  pp.  363-365 
and  595-597. 

9  P.  256.  BluntschH's  Modern  State,  p.  43. 

1"  P.  256.  Lord  Eldon  thought  that  the  abolition  of  the  rotten 
boroughs  endangered  all  property  in  England.  "Ich  erinnere  nur 
an  die  Rede  dcs  alten  Lord  Kanzlers  Eldon,  dcr  bohauptete,  mit 
dcr  Aufhebung  der  rotten  borouglis  sci  alios  Eigentum  in  England 
bedroht."  G.  Schmoller's  Grundfragen  der  Sozialpolitik  und  der 
Volkswirtschaftslehre,  2d.  ed.,  p.  73. 

"  P.  257.  The  question  of  abolition  without  compensation  to 
the  owners  is  a  different  one.     Certainly  it  is  i)Ossiblc  to  argue 


262     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

strongly  that  it  would  have  been  better  for  the  institution  of  private 
propert}'^  in  the  future  if  North  and  South  had  agreed  upon  abolition 
of  slavery  with  compensation,  and  war  had  been  prevented. 

12  P.  257.  The  writer  speaks  only  from  observation. 

1*  P.  258.  The  present  writer  has  no  disposition  to  dogmatise 
on  the  vexed  problem  of  the  causes  of  the  fall  of  Rome.  This  is 
tlirown  out  merely  as  a  suggestion. 


CHAPTER  X 

A   DISCUSSION   OF   THE   KINDS   OF   PROPERTY  ^ 

We  have  considered  the  nature  of  property  in  general 
and  have  treated  certain  phases  of  private  property  in 
particular.  We  must  next  attempt  to  classify  property 
with  respect  to  owners  and  with  respect  to  the  objects 
over  which  property  rights  are  extended.  We  wish  to 
know  the  purposes  of  property  and  to  ascertain  how 
various  property  arrangements  affect  the  public  weal. 
But  property  is  not  a  unity  but  rather,  as  we  have  seen, 
a  bundle  of  rights,  and  what  holds  for  certain  kinds  of 
economic  goods  will  not  hold  for  others:  also  we  must 
consider  the  evolution  of  property  with  respect  to  the 
different  classes  of  owners. 

Is  public  property  better  than  private  property? 
This  is  really  a  question  which  cannot  be  answered. 
\ATiat  has  to  be  considered  is  whether  for  particular 
categories  of  economic  goods — also  frequently  for  parti- 
cular places  and  in  given  periods  of  time — we  have  to  re- 
commend public  ownership  or  private  ownership.  It 
is  impossible  therefore  to  proceed  far  in  our  inquiries 
without  classification,  and  this  will  now  be  under- 
taken. 

First  of  all  we  make  a  distinction  between  the  classi- 
fication with  respect  to  the  owners  of  property,  called 
property  subjects,  and  the  classification  of  the  things 

263 


264     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

over  which  the  rights  of  property  are  extended,  called 
property  objects. 

AA.  Classifications  with  respect  to  property  subjects. 

When  we  consider  property  from  this  point  of  view 
we  make  several  different  classifications,  not  mutually 
exclusive. 

First,  we  have  a  distinction  of  great  historical  im- 
portance, and  one  not  wholly  without  present  economic 
significance. 

I.  Common  Property,  and 

II.  Property  in  severalty. 

Common  property  is  a  step  beyond  free  goods;  and 
in  many  cases,  if  we  use  strict  terminology,  we  must 
speak  of  common  possession  instead  of  common  prop- 
erty; the  common  possession  ripening  in  many  cases  into 
full  conomon  property.  Possession,  incipient  ownership, 
sometimes  full  property,  is  asserted  by  groups  of  various 
kinds,  perhaps  tribes,  perhaps  associations  of  a  different 
character.  The  holdings  of  American  Indians  illustrate 
this  distinction:  the  older  form  of  possession  or  owner- 
ship was  tribal,  and  this  still  prevails  to  some  extent, 
although  for  a  long  time  it  has  been  the  aim  of  most 
men  who  would  elevate  the  Indian  to  replace  common 
property  and  its  collective  responsibility  with  property 
in  severalty  and  its  individual  responsibility.  Very 
generally  in  primitive  times  associations  enjoying  com- 
mon property  were  based  upon  ties  of  blood,  real  or 
assumed.  We  have  the  common  pastures  and  common 
forests  which  have  been  so  general  in  early  civilisations 
and  which  have  extended  down  to  our  own  day  in  some 
parts  of  the  world.    We  have  in  New  England  a  sur- 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       265 

vival  in  the  term  '' common"  as  applied  to  the  Boston 
park  which  bears  that  name,  and  the  Boston  Common 
is  a  present  day  property  survival  from  an  earlier  stage 
of  economic  evolution.  A  typical  European  illustration 
is  found  in  the  allmendes  of  Switzerland,  generally 
mountain  pastures  which  are  enjoyed  in  common  by 
members  of  a  community,  or  township,  as  we  might 
say;  sometimes  by  a  certain  class  of  the  community. ^ 
Similar  arrangements  may  still  be  found  in  the  moun- 
tainous parts  of  Bavaria  and  of  North  Wales  and  in 
many  other  places.^ 

Common  property  is  something  separate  and  dis- 
tinct from  private  property  and  also  from  public  prop- 
erty; it  is  an  institution  which  fits  with  difficulty  into 
modern  economic  systems  and  perhaps  with  still  greater 
difficulty  into  modern  legal  systems,  especially  those  of 
England  and  America.  We  observe  a  general  tendency 
in  modern  times  to  find  an  owner  in  some  natural  per- 
son or  to  develop  by  some  legal  fiction,  an  artificial 
legal  entity,  a  private  corporation  of  some  sort,  out  of 
the  association.'*  In  many  cases  public  property  has 
grown  out  of  conmion  property  and  there  are  transitional 
stages  in  which  it  is  difficult  to  draw  the  line.  Large 
tracts  of  forest  land  in  Germany  never  were  individual 
private  property;  formerly  some  of  these  forests  were 
common  property  and  have  now  become  pubhc  prop- 
erty. In  modern  times  grounds  and  buildings,  belong- 
ing to  what  is  legally  simply  a  private  corporation, 
have  in  some  cases  economic  arrangements  for  a  common 
use  which  are  more  or  less  similar  to  those  of  common 
property, — for  example,  a  club-house,  and  golf  links. 


266     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Property  in  severalty  is  undoubtedly  in  general  better 
for  those  who  have  attained  the  highest  stages  of  eco- 
nomic civilisation.  It  leads  to  a  greater  production 
and  it  is  not  clear  that  it  leads  to  a  worse  distribution, 
although  unquestionably  to  a  far  more  unequal  one. 
At  any  rate,  it  would  generally  be  conceded  that  the 
universally  greater  production  outweighs  any  possible 
deterioration  in  distribution.  Nevertheless  it  is  always 
a  mistake  to  impose  institutions  corresponding  to  one 
stage  of  economic  civilisation  and  to  the  psychical 
natures  of  the  men  who  produced  it,  upon  a  different 
and  lower  stage  of  civilisation  with  men  of  different 
characters.  We  must  take  into  account  time  and  place. 
We  have  to  consider  the  ripeness  for  change  from  com- 
mon property  to  property  in  severalty.  While  for  peo- 
ple who  have  reached  our  stage  of  civilisation  property 
in  severalty  is  better  than  common  property,  with  pos- 
sibly few  exceptions,  is  it  true  for  people  in  every  stage 
of  development?  There  has  been  controversy  in  re- 
gard to  the  Indians,  as  to  whether  they  are  ripe  for  the 
change.  It  is  a  general  opinion  that  they  are  prepared 
to  derive  benefit  from  the  passage  or  transition  from 
common  property  to  property  in  severalty.  But  the 
author  has  never  been  quite  so  sure.  Since  we  have  so 
widely  introduced  property  in  severalty  and  tried  to 
force  it  upon  the  Indians,  we  have  seen  developments 
which  are  not  altogether  satisfactory.  The  result  thus 
far  has  not  altogether  told  for  property  in  severalty  in 
their  case,  and  the  difficulty  is  just  this, — that  those  who 
have  advocated  property  in  severalty  for  them  have  not 
considered  relativity.    They  have  not  connected  it  with 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       267 

the  general  social  and  industrial  development  of  the  peo- 
ple. Property  is  not  one  conception,  the  same  at  all 
times  and  places,  but  is  a  relative  conception  which 
must  change  with  change  in  civilisation.  The  change 
from  common  property  to  property  in  severalty  is  an 
evolutionary  one  and  in  this  sense  natural  but  to  be  found 
beneficent  it  must  not  go  ahead  of  the  change  in  the  peo- 
ple. The  Indians  may  not  have  the  idea  of  property  and 
may  give  away  whatever  they  have,  even  their  birth- 
right, for  a  mess  of  pottage  whereas  if  they  are  taken  to- 
gether in  the  reservation,  each  exercising  a  certain  con- 
trol over  the  other,  and  with  the  alienation  of  property 
made  impossible,  the  result  might  be  a  greater  produc- 
tion under  common  property  than  under  property  in 
severalty,  as  well  as  a  better  distribution.''  Everyone 
who  is  acquainted  with  what  has  taken  place  in  the  last 
few  years  must  be  convinced  that  we  cannot  force 
rapidly  the  industrial  evolution,  and  must  view  with 
apprehension  the  giving  to  the  Indians  of  property  in 
severalty.  Furthermore  if  we  are  going  to  extend  our 
government  elsewhere,  for  example  in  the  Philippines 
and  in  other  remote  islands,  peopled  by  those  living 
in  primitive  conditions,  we  shall  have  under  our  govern- 
ment people  in  different  stages.  We  cannot  at  once 
decide  even  so  comparatively  simple  a  question  as  that 
of  common  property  versus  property  in  severalty,  but 
must  examine  the  conditions  of  industrial  and  moral 
development. 

Especially  noteworthy  is  it  that  in  Ireland,  where  very 
advanced  ideas  of  land  tenure  are  being  carried  out, 
common  pasturage  for  small  groups  is  occasionally  be- 


268    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

ing  provided,  and  that  one  of  the  radical  proposals 
for  land  reform  in  England  includes  precisely  a  similar 
arrangement. 

We  have  in  more  modern  times  a  distinction  between 
pubHc  and  private  property.  So  we  take  as  our  second 
classification : 

I.  Public  property. 
II.  Private  property. 

Our  classifications  are  not  mutually  exclusive.  We 
have  here  simply  a  classification  according  to  a  some- 
what different  principle.  Public  property  is  now  sharply 
defined  as  property  belonging  to  a  certain  political  unit 
which  is  a  legal  person.  We  have  at  the  present  time 
in  law  natural  persons  and  artificial  persons,  or  legal 
persons  and  legal  entities.  The  property  of  the  city  of 
Madison,  Wisconsin,  is  as  sharply  defined  as  the  prop- 
erty of  any  individual  in  the  city  of  Madison;  but  this 
is  something  quite  different  from  the  conmion  property 
of  the  earlier  times. 

Our  next  classification  is  one  of  great  importance  in 
the  discussion  of  modern  distribution  and  modern  eco- 
nomic problems  in  general.    It  is  as  follows: 
I.  Individual  property. 
II.  The  property  of  partnerships. 

III.  Collective  corporate  property,  divided  into: 

1.  Collective  property  of  private  corporations. 

2.  Collective    property   of    quasi-pubhc    cor- 

porations. 

3.  Collective  property  of  public  corporations 

and  bodies. 
This  distinction  between  property  controlled  by  the 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY      269 

individual  and  property  which  is  controlled  by  the  col- 
lective body  is,  as  already  intimated,  one  of  prime  im- 
portance in  modern  discussions.  It  is  said  that  we  are 
passing  away  from  the  regime  of  individual  property 
in  capital  to  collective  property  in  capital;  but  the  col- 
lective property  is  largely  the  property  of  private  cor- 
porations. The  change  from  individual  to  collective 
corporate  property  in  capital  is  a  most  momentous 
change  which  has  been  taking  place  in  the  last  fifty 
years.  We  have  been  passing  over  from  the  regime  of 
the  one  to  the  regime  of  the  other  in  various  forms. 
That  is,  the  private  corporation  is  an  expression  of 
collectivism  just  as  much  as  gas  works  owned  by  the 
city.    It  is  simply  a  different  sort  of  collectivism. 

It  is  very  important  to  make  this  distinction  be- 
tween individual  property  and  collective  corporate 
property.  In  collective  corporate  property  there  are, 
to  be  sure,  shares,  and  these  are  owned  as  individual 
property;  but  no  one  of  these  shares  is  the  corporation 
nor  all  of  them  if  considered  individually.  A,  B  and  C 
own  the  shares  individually,  but  as  individuals  they  are 
not  in  an  economic  sense  the  corporation.  That  is  a 
separate  economic  entity,  and  legally  also  it  is  generally 
looked  upon  as  a  distinct  entity.*^  A  share  of  stock  in  a 
corporation  simply  represents  an  equity  or  right  in  it. 
The  regime  of  individual  property  in  capital  is  passing 
away  with  the  regime  of  individual  production;  but  in 
agriculture  we  notice  a  pursuit  in  which  production  is 
still  carried  on  individually  for  the  most  part;  and  land, 
together  with  the  capital  invested  in  it,  is  still  mainly 
owned  individually.    We  need  not  stop  now  to  consider 


270     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

statistics,  but  simply  note  the  well-known  fact  that  a 
large  part  of  the  productive  property  in  the  most  highly 
civilised  countries  of  the  world  to-day  is  collective  cor- 
porate property.  Much  remains  in  individual  owner- 
ship, but  collectively  owned  capital  is  on  the  whole 
dominant.  To  this  general  rule  there  are  exceptions 
of  which  the  chief  have  been  mentioned. 

Partnership  property  may  be  regarded  logically  as  a 
step  in  the  evolution  from  purely  individual  property 
to  corporate  or  collective  property,  although  it  is  a  step 
which  in  actual  evolution  has  often  been  omitted,  for 
when  large  amounts  of  capital  were  required  for  single 
enterprises  and  the  organisation  of  corporate  enterprises 
with  limited  liability  was  made  easy,  a  great  movement 
in  the  direction  of  corporate  and  collective  property  at 
once  took  place.  The  property  of  quasi-public  cor- 
porations, such  as  privately  owned  railways,  gas  works, 
etc.  is  also  logically  an  intermediate  stage  between  the 
property  of  private  corporations  and  property  of  public 
corporations.  It  is  private  property,  but  subject  to  a 
far-reaching  social  control,  involving  peculiar  burdens 
and  disabilities. 

It  is  possible  to  carry  the  classification  further,  but 
this  would  involve  refinements  taking  us  too  far  afield 
for  present  purposes. 


Notes  and  References  to  Chapter  X 

^  P.  263.  The  author  should  perhaps  put  first  the  late  Professor 
Knies's  lectures  among  his  sources  for  the  present  chapter,  but  sec- 
ond would  come  Professor  Wagner's  Grundlegung,  3d.  ed.,  Vol.  II, 
pp.  193-210;  also  p.  273,  §  129B.  But  while  credit  is  freely  given 
for  help  and  while  no  departure  from  others  has  been  made  simply 
to  create  an  artificial  appearance  of  originality,  this  topic  has  been 
so  thoroughly  worked  over  by  the  author,  and  for  his  own  purposes 
so  many  changes  from  other  classifications  have  been  made,  that 
no  one  else  may  be  held  responsible  for  what  is  here  presented. 

2  P.  265.  It  has  frequently  happened  that  as  this  local  political 
organisation  has  grown  and  changed,  some  people  going  away 
and  others  coming  into  the  community,  a  distinction  has  been 
made  between  the  poUtical  community  and  the  economic  com- 
munity, only  the  latter  participating  in  the  advantages  of  the  all- 
mendes. 

3  P.  265.  Professor  Wagner  speaks  of  church  property  as  common 
property,  and  from  the  economic  point  of  view  it  may  perhaps  be 
looked  upon  as  such. 

*  P.  265.  John  Stuart  Mill  gives  as  illustration  the  experience  of 
the  English  in  India,  who  in  earlier  days,  not  being  able  to  grasp 
the  idea  of  common  property  of  village  communities,  did  in  some 
cases  a  great  injustice  by  making  out  of  the  common  property  pri- 
vate property  and  giving  it  to  a  chief  or  head  man,  who  was  only  a 
tax  gatherer.  They  searched  for  the  owner,  taking  it  for  granted 
that  as  land  in  England  had  an  individual  owner,  land  in  India 
must  also  have  an  individual  owner,  and  they  simply  mistook  the 
tax  gatherer,  the  Zamindar,  for  a  private  own,er.  This  has  often 
been  adduced  as  a  typical  illustration  of  the  evil  resulting  from  a 
failure  to  understand  economic  history  and  the  significance  of  eco- 
nomic stages.  See  Mill's  Principles  of  Political  Economy,  Bk.  II, 
Chap.  IX,  §  4. 

^  P.  267.  Difficulties  of  the  old  arrangements  are  not  overlooked. 
They  were  not  satisfactory;  and  it  is  not  attempted  here  and  now 

271 


272    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  offer  a  solution.     It  is  simply  intended  to  emphasise  the  fact 
that  we  must  be  cautious  in  cases  of  this  kind. 

8  P.  269.  There  is  a  present  tendency  in  legal  decisions  to  look  upon 
A.  B.  C.  as  being  the  corporation,  when  they  own  all  the  stock.  See 
on  this  point,  Haney's  Business  Organization  and  Combination, 
pp.  82  et  seqq.  This,  however,  has  httle  bearing  on  the  precise  point 
under  discussion,  which  turns  upon  the  economic  and  social  dis- 
tinction between  individual  property  and  different  kinds  of  collective 
property. 


CHAPTER  XI 

A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY  (Concluded) 

BB.  Classifications  with  respect  to  property  objects. 

We  pass  now  to  a  classification  which  is  based  upon 
differences  in  the  objects  of  property,  in  the  things  over 
which  property  rights  extend  rather  than  in  the  persons 
in  whom  the  property  right  is  vested. 

In  a  historical  treatment  it  is  well  to  make  a  distinc- 
tion which  is  not  found  in  any  of  the  books,  namely, 
that  between: 

I.  Property  in  human  beings,  and 
II.  Property  extraneous  to  and  exclusive  of  human 
beings. 

Historically  this  distinction  is  important  because  we 
are  growing  away  from  property  rights  in  human  beings. 
We  still  have  vestiges  of  these  rights,  as  in  the  cases  of 
peonage  in  the  South,  the  contracts  binding  Italian  im- 
migrants in  the  North,  the  practical  enslavement  by 
the  whites  of  the  natives  of  the  Congo,  etc.  These 
denote  a  quasi-property  in  human  beings,  but  the  old 
forms  of  such  property  are  certainly  passing  away,  and 
their  going  indicates  marked  social  development.  Or 
we  may  express  ourselves  differently  and  say  that  on 
the  analogy  of  land,  ownership  is  generally  a  thing  of 
the  past,  but  various  sorts  of  ''estates"  in  human  beings 
still  exist. 

273 


274    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

The  next  classification  is:  ^ 
I.  Property  in  corporeal  things. ^ 
II.  Property  in  personal  services. 

III.  Property  in  relation  to  persons  and  things. 

Property  in  personal  services  means  right  to  serv- 
ices, and  property  in  relation  to  persons  and  things  in- 
cludes the  so-called  intellectual  property, —  patents, 
copyrights,  trade-marks,  good  will. 

We  next  have  the  distinction  between : 
I.  Property  in  mobilia. 
II.  Property  in  immobilia. 

This  classification  needs  to  be  brought  into  connec- 
tion with  the  following  one,  according  to  which  goods 
are  divided  into  two  classes,  enjoyment  goods  and  pro- 
duction goods.  It  cuts  across  it  somewhat.  We  can, 
for  example,  have  enjoyment  goods  which  are  mobilia 
and  enjoyment  goods  which  are  immobilia.  So  too, 
production  goods  can  be  both  mobilia  and  immobilia. 

The  distinction  between  property  in  mobilia  and  prop- 
erty in  immobilia  is  one  of  great  importance.  The  dif- 
ference in  the  periods  in  which  property  was  developed 
is  one  which  brings  out  the  difference  between  property 
in  mobilia  and  property  in  immobilia,  property  in  im- 
mobiUa  being  of  far  slower  development.  There  are 
several  reasons  for  this :  In  primitive  periods  abundance 
of  immobilia,  including  land,  and  migration  rendered 
the  exclusive  appropriation  of  immobilia  difficult.  Yet 
another  reason  is  that  mobilia  or  movable  things  rep- 
resented at  first  more  labour,  more  toil  and  effort 
than  the  immobilia.  The  mobilia  stood  for  an  incor- 
poration of  labour  power.    The  inmiobilia  in  primitive 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY      275 

society  were  the  product  of  nature;  they  represented 
the  nature  factor.  In  the  course  of  development  this 
particular  difference,  though  it  does  not  disappear,  is 
diminished.  As  time  goes  on,  more  and  more  work  is 
intermingled  with  the  nature  factor,  with  what  nature 
gives.  Especially  is  this  true  with  land,  and  included 
in  immobilia  we  have  chiefly  land.^  There  are  bridges, 
ditches,  houses,  machinery,  etc.,  connected  permanently 
with  the  land  and  improvements,  which  after  a  while  we 
cannot  distinguish  from  the  land.  For  instance,  we 
cannot  go  into  a  country  like  Holland  and  always  dis- 
tinguish between  what  nature  has  done  and  what  man 
has  done.  Yet  even  in  the  case  of  the  steam  railways 
of  Wisconsin,  the  land  has  been  valued  separately  from 
the  tracks,  ties,  and  other  improvements  which  make 
the  railways  and  spoil  the  land  for  other  uses.  Probably 
in  few  cases  would  the  separate  valuation  be  more  dif- 
ficult. 

Land  represents  more  and  more  the  results  of  human 
effort  of  one  sort  or  another.  We  may  therefore  say 
that  in  this  particular,  as  time  goes  on,  the  distinction 
between  mobilia  and  immobilia  is  less  sharply  defined 
than  in  primitive  times.  Doubtless  it  is  on  this  account 
that  the  statute  law  makes  less  distinction  in  later  than 
in  earlier  times  between  property  in  mobilia  and  in  im- 
mobilia. Nevertheless,  the  law  may  go  too  far  and  we 
may  go  too  far  in  this  respect.  The  difference  which 
does  actually  exist  even  in  modern  times  may  be  over- 
looked. But  recent  discussions,  like  those  of  Henry 
George,  sharpen  the  distinction  for  us;  some  of  them 
even  exaggerate  it. 


276     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

However,  a  fuller  treatment  of  this  important  topic 
belongs  to  the  part  of  the  present  work  which  deals  with 
Landed  Property. 

Again  we  have  the  distinction  between : 

I.  Property  in  enjoyment  (consumption)  goods,  and 
II.  Property  in  production  goods. 

I.  Enjoyment  Goods. 

If  we  had  a  word  which  defined  the  idea  of  enjoy- 
ment goods  as  sharply  as  does  the  German  word  Ge- 
brauchsvermbgen,  it  would  be  well  to  use  it  here  for 
property  in  consumption  goods.  But  in  the  absence  of 
a  clearly  defined  word,  we  may  use  the  current  phrase 
property  in  enjoyment  goods,  or  the  abbreviated  ex- 
pression enjoyment  property  which  the  discussions  of 
modern  theories  have  made  familiar  to  us  all. 

We  have,  then,  these  two  great  classes,  goods  for  use 
and  goods  for  production,  the  former  for  immediate  en- 
joyment, the  latter  for  mediate  enjoyment. 

The  two  main  classes  of  goods  for  production  are 
capital  and  land.  Capital  we  do  not  use  for  immediate 
enjoyment;  it  produces  the  things  which  we  use  immedi- 
ately, though  this  distinction  is  not  always  a  sharp  one 
so  far  as  an  individual  good  is  concerned.  Some  objects 
can  be  used  either  for  enjoyment  or  for  further  produc- 
tion, e.  g.,  a,  board  for  the  use  of  children  in  a  see-saw, 
or  for  use  in  the  building  of  a  house.  We  have,  however, 
to  make  somewhat  different  distinctions  when  we  dis- 
cuss the  classification  of  objects  of  property  from  an  in- 
dividual point  of  view,  from  those  which  we  make  when 
discussing  it  from  a  social  point  of  view.  That  which 
to  the  individual  is  productive  resources  may  be  to  so- 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       277 

ciety  simply  enjoyment  goods.  The  food  of  labourers, 
for  example,  from  their  point  of  view  and  from  the 
general  social  point  of  view  is  enjoyment  property; 
from  the  purely  individualistic  point  of  view  of  an  em- 
ployer, it  is  productive.  That  is  akin  to  the  distinction 
which  we  make  between  individual  production  and  so- 
cial production.  Individual  production  means  acquisi- 
tion for  the  individual,  and  the  individual  may  acquire 
things  though  he  may  not  produce  them  for  the  good  of 
society.  The  gambler  may  acquire,  but  socially  the 
work  of  the  gambler  is  destructive  and  not  productive. 
Generally  a  distinction  is  made  between  the  tools  (capi- 
tal) with  which  a  workman  has  to  earn  future  consump- 
tion goods,  and  consumption  goods.  The  moral  systems 
of  classical  antiquity  recognise  a  distinction  of  this 
kind,  as  did  also  the  Old  Testament.  In  Deuteronomy 
XXIV :  6,  it  is  said  that  ''No  man  shall  take  the  nether  or 
the  upper  millstone  to  pledge:  for  he  taketh  a  man's 
life  to  pledge."  And  in  Exodus  xxii:  26  we  find,  ''If 
thou  at  all  take  thy  neighbour's  raiment  to  pledge,  thou 
shalt  dehver  it  unto  him  by  that  the  sun  goeth  down." 
Modern  law  as  found  in  American  States  makes  distinc- 
tions which  have  a  like  intent. 

The  distinction  between  enjoyment  goods  and  pro- 
duction goods  is  one  which  has  been  emphasised  by  the 
socialists,  especially  with  reference  to  property;  in  gen- 
eral they  hold  that  property  in  consumption  goods 
should  be  private,  while  property  in  production  goods 
should  be  public.^ 

Let  us  consider  the  further  division  of  property  in 
enjoyment  goods.    If  we  desire,  we  can  go  far  in  dividing 


278    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  subdividing  enjoyment  goods,^  but  it  leads  rather  to 
confusion  than  to  enhghtenment  in  a  general  treatment 
of  our  subject.    A  few  general  remarks  must  suffice. 

The  distinction  between  goods  which  must  be  indi- 
vidually used  and  those  which  admit  of  a  large  collec- 
tive use  is  one  of  importance  in  property  arrangements. 
It  is  apparent  in  enjoyment  goods  for  individual  use 
that  we  have  strong  ground  for  private  property.  But 
when  goods  are  of  such  a  nature  that  they  admit  regu- 
larly of  collective  use,  the  question  must  be  whether  as 
private  property  they  will  afford  as  much  benefit  to  so- 
ciety as  they  will  if  public  property.  Take,  for  instance, 
parks, — Central  Park  in  New  York  City  or  Lincoln 
Park  in  Chicago.  If  private  property,  these  would  be 
used  by  a  few  private  individuals  who  would  derive 
enjoyment  from  them;  but  they  are  adapted  to  a  larger 
use  and  they  afford  more  pleasure  if  used  collectively. 
There  is  opportunity  for  development  of  public  prop- 
erty along  this  line. 

On  the  other  hand,  there  may  be  certain  kinds  of 
goods,  which,  though  admitting  of  a  collective  use,  will 
not  always  secure  the  largest  total  enjoyment  through 
that  collective  use,  as  in  the  case  of  books,  for  example, 
which  are  constantly  needed  by  students.  Although  the 
books  are  capable  of  collective  use,  yet  the  total  amount 
of  social  benefit  is  greater  if  we  have  private  property 
in  a  very  large  proportion  of  all  books.  We  have,  to  be 
sure,  effective  public  property  in  the  great  collections  of 
books,  but  private  collections  for  use  by  individuals 
who  need  the  books  near  at  hand  are  also  necessary. 

We  thus  divide  enjoyment  goods  into  classes,  some 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       279 

to  be  used  collectively,  some  individually,  and  some 
both  collectively  and  individually. 

We  find  often  that  the  sum  total  of  satisfactions  is 
far  greater  when  we  have  collective  use,  which  is  fav- 
oured by  public  property,  than  when  we  have  indi- 
vidual use,  which  is  favoured  by  private  property. 
We  have  a  ground  for  public  property  in  enjoyment  goods 
when  relatively  the  cost  diminishes  with  the  number  who 
enjoy  the  goods  under  consideration.  Consider  again 
public  parks,  where  the  increase  in  the  cost  of  enjoy- 
ment is  relatively  small  as  the  number  enjoying  the 
goods  increases;  consider  public  libraries,  large  collec- 
tions of  pictures,  etc.  Many  believe  it  wrong  that  one 
of  the  greatest  works  of  art  should  be  the  private  prop- 
erty of  any  individual,  or  that  a  private  individual 
should  attempt  to  exclude  others  from  the  enjoyment 
of  some  natural  wonder,  as,  it  is  alleged,  did  the  owner 
of  property  around  Loch  Lomond  recently. 

But  we  must  observe  this  also, — that  there  is  a  vary- 
ing degree  of  ripeness  for  collective  enjoyment.  We 
may  say  that  the  more  highly  developed  a  nation  or  com- 
munity of  people,  and  the  greater  their  capacity  for  en- 
joying collective  property,  the  stronger  the  argument  for  a 
large  amount  of  collective  property  in  enjoyment  goods. 
It  would  not  be  possible  to  give  a  crude,  half  civilised 
people  the  same  opportunities  for  collective  enjoyment 
as  those  which  can  be  given  to  a  highly  civilised  nation. 
They  would  not  know  how  to  use  the  objects  of  prop- 
erty; or  they  would  misuse  them.  So  the  ripeness  and 
social  sense  of  the  people  determine  how  large  will  be 
the  utility  derived  from  public  parks. 


280     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

We  must  consider,  too,  certain  conditions  of  time 
and  place.  In  the  South  in  the  United  States,  for  ex- 
ample, we  have  obstacles  imposed  in  the  way  of  public 
property  on  account  of  the  antagonism  between  the 
white  people  and  the  negroes.  This  is  one  reason  why 
there  are  so  few  pubhc  libraries  in  the  South.  Taking 
things  as  they  are,  whether  they  ought  to  be  so  or  not, 
in  some  cases  there  the  alternative  to  private  property 
is  what  we  may  call  quasi-public  property,  i.  e.,  private 
property  in  the  legal  sense,  but  private  property  of  a 
charitable  corporation  existing  for  philanthropic  or  edu- 
cational purposes. 

Enjoyment  goods  of  different  kinds  and  qualities  should 
also  be  distinguished  with  respect  to  their  quantities, 
whether  they  are  in  the  hands  of  a  single  individual  or 
in  the  hands  of  society.  Has  the  individual  enough  for 
bare  existence?  or  for  comfort?  enough  for  the  higher 
Ufe  of  art?  or  so  great  a  quantity  as  to  tempt  to  injurious 
luxury  and  excesses?  And,  similarly,  are  enough  goods 
produced  in  a  given  society  at  a  given  time  to  enable 
all  to  have  comfort?  to  enable  all  or  only  a  portion  of 
society  to  enjoy  the  higher  things  of  life?  No  entirely 
satisfactory  ideals  of  distribution  can  be  framed  until 
we  have  something  like  approximate  knowledge  of  the 
actual  and  potential  possibilities  of  production. 

The  law  sometimes  makes  a  distinction  between 
property  in  goods  sufficient  for  bare  support — the 
necessaries — and  property  in  goods  in  sufficient  abun- 
dance to  supply  the  comforts  and  luxuries  of  Ufe;  also 
a  further  distinction  between  enjoyment  goods  and  pro- 
duction goods.    For  instance,  when  it  comes  to  the  tak- 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       281 

ing  of  property  for  the  benefit  of  creditors,  the  law 
sometimes  fixes  a  certain  hmit  and  recognises  the  dif- 
ference between  the  means  of  comfortable  hving  and 
a  bare  support.^ 

11.  Production  goods. 

The  first  main  classification  is  between 

1.  Capital,  and 

2.  Land. 

1.  Capital.  Though  capital  may  be  further  subdi- 
vided in  a  variety  of  ways,  for  present  purposes,  it  is 
not  necessary  to  bring  forward  and  discuss  all  possible 
classifications.  Here  as  elsewhere  we  have  the  distinc- 
tion between  the  mobilia  and  immobilia  to  which  atten- 
tion has  already  been  called.  Money,  a  specially  mobile 
kind  of  capital,  is  under  laws  of  property  ^  which  would 
not  in  every  particular  apply  to  factories.^  An  elabora- 
tion of  the  distinctions  between  ''fixed  ",  and  "circulat- 
ing ",  "specialised",  and  "free"  capital  belongs  in  a 
general  treatise,  or  in  a  special  treatise  on  capital  or  on 
some  aspects  of  capital  problems. 

2.  Land.  Classification  of  the  different  sorts  of  land 
is  of  the  highest  importance  in  a  treatise  on  property, 
for  property  arrangements  which  apply  to  one  kind  do 
not  apply  to  another.  Land  is  not  all  alike;  it  has  pe- 
culiarities which  give  us  different  varieties  of  land. 
Naturally,  however,  there  are  certain  things  which  can 
be  said  with  respect  to  land  in  general. 

Men  in  all  parts  of  the  world  in  many  different  ages 
have  known  that  there  are  peculiarities  in  land.  Cer- 
tainly in  earlier  times  it  did  not  seem  so  natural  a  thing 
that  there  should  be  property  in  land  as  that  there 


282    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

should  be  property  in  movable  things.  We  find  this 
expressed  in  many  ways  and  in  many  laws.  In  a  recent 
law  in  the  Servian  code,  a  distinction  is  made  be- 
tween landed  property  and  other  property.  There  it  is 
said  that  ''the  right  of  property  over  products  and 
moveables  acquired  by  human  exertion  is  based  on  na- 
ture herself  and  is  established  by  natural  laws."  But 
"the  right  of  property  over  realty  and  soil,  whether 
cultivated  or  uncultivated,  is  confirmed  by  the  con- 
stitution of  the  country  and  by  civil  laws."  Here  is 
not  only  an  implied  distinction,  but  an  expressed 
distinction,  interesting  in  a  code  comparatively  re- 
cent.^ 

A  discussion  of  land  laws  and  their  reform  does  not 
belong  here,  the  purpose  being  simply  to  show  that 
there  are  certain  peculiarities  in  land  which  have  re- 
ceived recognition. 

The  idea  of  the  Mussulman  law,  as  stated  by  Pro- 
fessor Gide,  is  that  land  is  not  a  fit  subject  for  property 
until,  on  the  one  hand,  work  has  been  incorporated 
into  it,  and  until,  on  the  other  hand,  it  has  been  ren- 
dered socially  useful.  These  are  the  underlying  ideas, 
although  they  may  not  be  very  well  carried  out,  just 
as  many  of  our  laws,  and  many  of  the  precepts  which 
we  accept  in  the  Bible,  are  not  carried  out  in  practice. 
But  the  ideas  are  at  any  rate  recognised  in  a  modern 
code,  in  this  new  Servian  code.  Such  ideas  as  this  show 
a  recognition  of  the  difference  between  landed  property 
and  other  property. 

We  find  similar  underlying  ideas  in  the  land  legisla- 
tion of  the  United  States,  which  aims  at  connecting 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       283 

service  with  the  acquisition  of  property  in  land.  We 
have  the  homestead  laws,  which  give  a  farm  but  in  ex- 
change for  the  service  of  living  on  it  and  cultivating  it. 
The  desert  land  acts  aim  to  induce  men  to  make  ''dead 
land  "  living  land  by  giving  property  in  land  as  a  reward 
of  labour.  The  same  thought  is  embodied  in  the  Tree 
Claim  act,  and  very  generally  in  American  legislation 
under  which  property  in  land  is  acquu-ed.  Often  the 
practical  application  of  the  idea  has  not  been  satis- 
factory, but  the  idea  itself  appears  clearly  enough. 

Now  taking  land  as  a  whole,  we  have  first  the  classi- 
fication : 

a.  dead  land, 

b.  living  land. 

Dead  land  is  unused,  uncultivated  land;  living  land 
is  land  which  has  been  redeemed  from  its  wild  state  and 
brought  under  cultivation.  The  distinction  cannot  al- 
ways be  clearly  drawn,  but  it  finds  legal  expression. 

Next  we  have  the  great  distinction  between : 

a.  land  for  subsurface  appropriation  of  natural 

gifts,  and 

b.  land  for  surface  appropriation  or  utilisation, 
a.  Land  for  subsurface  appropriation  of  natural  gifts. 

Here  we  have  to  do  with  mineral  lands.  The  great 
Prussian  mining  law  of  1865  makes  a  distinction  be- 
tween land  of  this  kind  and  other  land,  especially  ordi- 
nary agricultural  land,  recognising  private  property 
in  one,  and,  generally  speaking,  not  in  the  other;  recog- 
nising, as  we  have  seen,  private  property  in  the  minerals 
and  not  in  the  land  itself.  This  distinction  has  a  very 
important  bearing,  and  it  is  essential  that  it  be  under- 


284     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

stood.  For  a  long  time  many  people  in  the  United 
States  and  in  England  seemed  to  forget  the  distinction, 
so  far  as  practice  was  concerned  at  least.  We  must  have 
different  kinds  of  laws  for  these  two  sorts  of  landed 
property. 

b.  a'.  Land  may  be  used  simply  for  the  appropria- 
tion of  the  natural  gifts  on  the  surface.  Under  this 
head  may  be  classed  natural  forests,  fruit  growing  wild, 
game,  etc.,  the  surface  of  the  land  being  here  considered 
as  property  from  which  we  may  gather  what  nature 
affords.  Man  may  put  forth  exertion,  but  his  labour 
is  essentially  that  of  mere  appropriation  instead  of  giv- 
ing direction  to  the  forces  of  nature. 

A  further  subclass  (b')  is  cultivated  land,  or  arable 
land,  land  which  is  not  wild  land,  but  which  has  been 
brought  under  subjection,  which  has  been  tamed;  liv- 
ing land  as  contrasted  with  dead  land.  Under  cultivated 
land  we  find  various  classes,  as  pastures,  meadows,  gar- 
dens and  cultivated  forests,  which  have  to  be  ploughed, 
cultivated,  and  planted  only  at  long  intervals.  It  is 
only  in  the  newer  countries  that  we  have  natural  forests. 
In  the  older  countries  forests  are  cultivated  like  any 
other  crop.  To  that  we  in  the  United  States  must  also 
come. 

The  laws  which  would  with  propriety  apply  to  natural 
forests  would  not  apply  to  cultivated  forests.  Private 
property  would  in  some  respects  seem  to  be  especially 
suitable  for  natural  forests  and  public  property  for  cul- 
tivated forests.  So  far  as  the  appropriation  of  natural 
forests  is  concerned,  private  persons  will  appropriate 
and  utilise  them,  although  wastefully,  but  private  own- 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       285 

ers  will  not  provide  the  cultivated  forests;  so  it  would 
seem  to  be  desirable  that  these  should  be  public  prop- 
erty. That  is  from  the  standpoint  of  production.  From 
the  standpoint  of  distribution  we  might  not  come  to  the 
same  conclusion,  because  it  might  not  seem  fair  that  a 
few  persons  should  be  allowed  to  take  possession  of 
what  nature  has  produced.  We  might  say  also  from 
the  standpoint  of  distribution  that  there  would  not  be 
the  same  injustice  in  private  property  in  cultivated 
forests  because  these  forests  would  be  the  result  of  an 
outlay  of  capital  and  labour,  or,  to  use  the  most  com- 
prehensive term,  of  economic  energy.  We  in  the  United 
States  are  giving  over  our  forests  to  private  individuals 
and  not  reserving  those  rights  which  would  secure  to  the 
general  public  at  least  a  portion  of  the  increment  which 
might  accrue  therefrom,  but  as  the  natural  forests  are 
being  used  up  we  are  coming  over  to  public  ownership 
of  cultivated  forests. 

All  this  is  simply  brought  forward  here  suggestively, 
the  main  aim  being  to  show  varieties  of  property  ar- 
rangements. 

c'.  Building  sites.  The  distinction  between  building 
sites  and  agricultural  land  is  a  clear  one.  Municipal- 
isation  of  land,  for  example,  is  a  different  thing  from 
nationalisation  of  land.  In  our  cities  we  cannot  ad- 
vantageously have  unrestricted  private  property  in 
building  sites.  We  at  once  recognise  the  necessity  of 
restrictions  which  do  not  apply  to  agricultural  land. 
Professor  Wagner  thinks  that  under  building  sites  we 
might  have  two  heads,  viz.,  sites  in  large  cities  and  sites 
in  small  cities,  and  in  some  respects  this  distinction 


286    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

would  hold  inasmuch  as  the  social  control  is  much 
greater  in  the  former, 
d'.  Highways  of  all  kinds. 

a".  Roads  admitting  of  general  use,  canals,  rivers, 

and  the  sea  so  far  as  it  is  property  at  all. 
b".  Highways  that  admit  only  of  a  limited  use, 
generally  only  of  a  unified  use;  that  is,  use 
under  one  control.    Under  this  head  we  have 
all  highways  on  which  vehicles  move  upon 
tracks. 
Law  recognises  in  these  two  subclasses  a  different 
sort  of  property  from  the  kind  or  property  which  is 
recognised  in  agricultural  land.    We  have,  for  example, 
public  property  in  canals,  in  New  York  State,  and  a 
free  use  of  highways,  roads  and  streets  generally.    We 
have   also  private  property  in  highways,   such  high- 
ways as  those  of  the  second  class,  railways,  etc.    But 
we  restrict  such  property  and  hedge  it  in  as  we  do  not 
property  in  arable  land,  recognising  that  we  have  here 
to  do  with  a  different  sort  of  property. 

c.  Shore  and  riparian  lands.  The  property  arrange- 
ments respecting  shore  lands  are  of  great  economic 
significance  and  have  an  important  influence  both  upon 
the  production  and  distribution  of  wealth.  It  is  by 
traversing  shore  land  that  access  is  gained  to  water  and 
it  is  of  no  avail  that  water  is  a  free  good  if  there  is  no 
access  to  it.  Private  ownership  of  the  banks  of  a  stream 
in  an  arid  region  may  involve  virtual  private  ownership 
of  public  land  back  from  the  stream,  while  people  may 
be  deprived  of  the  enjoyment  of  lakes  and  seas  by  the 
exclusion  resulting  from  private  property  in  the  shores. 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       287 

A  whole  city  may  be  at  the  mercy  of  private  owners  of 
the  shores  of  the  harbours.  On  this  account  it  is  now 
generally  regarded  as  sound  poHcy  for  cities  to  own  the 
shores  of  navigable  waters  upon  which  they  are  situated; 
and  for  this  reason  also  it  is  recommended  by  an  impor- 
tant commission  in  England  that  the  laws  should  under 
suitable  restriction  render  accessible  to  the  public  the 
shores  of  the  waters  surrounding  Great  Britain,  even 
when  privately  owned.  ^°  The  Province  of  Ontario, 
Canada,  is  solving  the  problem  in  keeping  shore  lands 
in  public  property  and  allowing  regulated  use  to  private 
owners.  ^^  In  the  Dominion  of  Canada  itself  the  right 
to  the  foreshores  of  public  harbours  is  vested  in  the  gov- 
ernment itself,  and  the  latter  regulates  the  sale  or  lease 
of  such  lands. ^^  As  already  stated,  the  Constitution  of 
the  State  of  Rhode  Island  reserves  shore  rights  to  the 
general  pubhc.^^ 

In  this  place  it  is  sufficient  to  say  that  no  kind  of  land 
requires  more  careful  and  special  treatment  than  shore 
lands.  We  have  brought  before  us  all  those  questions 
comprised  under  riparian  rights. 

d.  Land  and  water.  Land  used  for  fishing  and  for 
the  cultivation  of  oysters  and  other  kinds  of  sea  food  so 
far  as  there  is  any  ownership  in  such  land.^^ 

e.  Property  in  water.  This  is  of  importance  in  many 
connections  and  with  the  growth  of  irrigation  has  at- 
tained new  significance.  As  we  use  the  term  land  in 
economics  in  its  broad  sense,  water  is  here  included. 
Fishing  could  be  considered  in  this  connection,  and  the 
question  raised  whether  property  in  water  should  carry 
with  it  property  in  fish  or  not.^^ 


288    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

This  finishes  our  classification.^^  The  significance  of 
it  is  readily  apparent;  but  it  is  especially  brought  out 
by  discussions  of  the  land  question.  We  see  that  it  is 
not  enough  simply  to  distinguish  between  mobilia  and 
immobilia,  a  distinction  recognised  from  time  imme- 
morial. With  the  development  of  society  we  develop 
new  classes  of  goods;  we  have  call  for  new  and  different 
sorts  of  property.  Otherwise  property  would  not  fulfil 
the  purpose  for  which  it  is  designed. 

Again  we  are  reminded  that  property  is  a  bundle  of 
rights  and  not  a  single  right.  It  cannot  as  a  unit  be 
attacked  nor  defended.  In  such  a  case  both  attack  and 
defence  are  likely  to  be  too  sweeping.  The  sociahsts 
do  make  a  distinction  between  enjoyment  property  and 
production  property,  but  they  do  not  go  far  enough 
in  their  analysis.  It  does  not  follow  because  private 
property  in  public  streets  is  undesirable  that  private 
property  should  be  condemned.  We  have  come  to  a 
time  when  there  is  need  of  a  more  careful  analysis.  The 
development  of  civilisation  requires  this.  In  our  eco- 
nomic development  we  have  gone  ahead  of  positive 
statute  law,  and  our  great  problem  is  to  bring  the  law 
and  public  administration  up  to  the  stage  of  economic 
evolution  which  we  have  reached. 

To  recapitulate,  we  have  found  these  various  classes 
of  property: 

AA.  Classifications  with  respect  to  property  subjects. 

A.  I.  Common  property. 
II.  Property  in  severalty. 

B.  I.  Pubhc  property. 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY      289 
II.  Private  property. 

C.      I.  Individual  property. 

II.  The  property  of  partnerships. 
III.  Collective  corporate  property. 

1.  Collective   property   of   private   cor- 

porations. 

2.  Collective   property    of   quasi-public 

corporations. 

3.  Collective  property  of  public  corpora- 

tions and  bodies. 
BB.  Classifications  with  respect  to  property  objects. 
Four  main  classes. 

A.  I.  Property  in  human  beings. 

II.  Property  extraneous  to  and  exclusive  of 
human  beings. 

B.  I.  Property  in  corporeal  things. 
II.  Property  in  personal  services. 

III.  Property  in  relation  to  persons  and  things. 

C.  I.  Property  in  mobilia. 
II.  Property  in  immobilia. 

D.  I.  Property     in     enjoyment     (consumption) 

goods. 

Classified  further  with  reference  to  the  following  con- 
siderations : 

1.  Number  of  users. 

(1)  Individual  use. 

(2)  Collective  use. 

(3)  Individual  and  collective  use. 


290    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

2.  Adequacy  of  supply,  of  goods.    (Neces- 
saries,   comforts,    luxuries,    etc.) 
II.  Property  in  production  goods. 

1.  Capital. 

(1)  a.  Mobilia. 

a'  Money,  b',  c',  etc. 
b.  Immobilia. 

a'  Buildings,  b',  c',  etc. 

(2)  a.  Fixed  capital. 

b.  Circulating  capital. 

c.  Specialised  capital. 

d.  Free  capital. 

2.  Land. 

(1)  a.  Dead  land, 
b.  Living  land. 

(2)  a.  Land    for    subsurface    appro- 

priation of  natural  gifts. 

b.  Land    for    surface    appropria- 

tion or  utilisation. 

a'.  Land   for   appropriation 

of  natural  gifts, 
b'.  Cultivated     land,     with 
pastures,  meadows,  gar- 
dens, and  artificial  for- 
ests as  subclasses, 
c'.  Building  sites, 
d'.  Highways. 

a".  Of  general  use. 
b".  Of  limited  use. 

c.  Shore  and  riparian  lands. 

d.  Land  under  water. 

e.  Property  in  water." 


Notes  and  References  to  Chapter  XI 

1  P.  274.  The  writer  takes  this  from  the  lectures  of  his  teacher, 
Professor  Knies. 

2  P.  274.  Sacheigentum,  Sachguter. 

3  P.  275.  Cf.  Wagner,  op.  cit.,  pp.  200-210,  where  the  reader  may- 
find  a  classification  similar  to  that  which  follows  in  this  chapter. 
While  it  is  different  in  important  particulars,  the  author  wishes 
to  acknowledge  his  indebtedness  to  it  for  helpful  suggestions. 

*  P.  277.  This  statement  requires  many  modifications  to  give 
us  a  correct  view  of  socialism.  They  believe  we  should,  in  the  so- 
cialistic state,  still  have  pubhc  parks;  and  on  the  other  hand  the 
more  moderate  socialists  certainly  would  allow  the  future  socialists 
to  own  individually  certain  tools  of  production, — saw,  hammer, 
perhaps  even  a  small  piece  of  ground  for  a  garden. 

^  P.  278.  As  is  done  by  Professor  Wagner. 

8  P.  281.  This  is  an  interesting  relaxation  in  the  rigour  of  the 
law,  in  favour  of  humanitarian  progress,  for  it  was  not  a  right  recog- 
nised by  common  law,  and  is  entirely  a  creation  of  statute  law.  Un- 
der common  law  not  only  was  all  the  property  of  a  debtor  liable  for 
his  debts,  but  he  was  liable  to  imprisormient  as  well.  In  America 
we  have  not  only  abrogated  imprisonment  for  debt,  but  have  made  a 
certain  part  of  the  creditor's  property  immune  from  seizure  for  debt. 
This  is  not  done,  however,  primarily  in  the  interest  of  the  debtor, 
but  in  the  interest  of  his  family,  and  therefore  in  the  interest  of 
society,  the  debtor's  obligations  to  support  his  family  being  "obliga- 
tions higher  than  such  as  bind  hira  to  pay  his  debts."  McMurray  v. 
Schuck,  99  Am.  Dec.  6G2  (1869).  See  also  Wright  v.  Pratt,  31  Wis. 
73  (1872) ;  Wilcox  v.  Hawley  et  al,  31  N.  Y.  648  (1864). 

7  P.  281.  See  People  v.  Williams,  24  Mich.  156  (1871);  Pirie  v. 
Chicago  Title  Co.,  182  U.  S.  438  (1901);  In  re  Fixen,  102  Fed.  295 
(1900) ;  Kuter  V.  Mich.  C.  Ry.,  14  Fed.  Cases  No.  7955  (1853);  Pat- 
terson V.  Wilson,  101  N.  C.  (1888),  584  at  p.  588. 

8  P.  281.  On  money  as  capital,  see  Hadley's  Economics,  Chap. 
VII,  "On  Money,"  especially  p.  181. 

» P.  282.  See  Gide's  Political  Economy,  Bk.  IV,  Chap.  Ill,  §  V 

291 


292     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

(English  tr.,  p.  454).  Professor  Gide  suggests  a  distinction  based 
upon  the  cultivation  of  the  soil,  and  there  is  a  similar  idea  shown  in 
the  Mussulman  law.  Professor  Gide  says  that  the  Mussulman  law 
restricts  property  in  land  to  such  land  as  has  been  the  object  of  ef- 
fective cultivation,  and  calls  it  living  land  in  contra-distinction  to 
uncultivated,  or  dead  land.  The  latter,  it  holds,  should  be  collective 
property.  When  any  man  has  put  life  into  dead  land,  it  shall  belong 
to  none  other.  "The  following  are  the  labours  which  are  thus  to 
transfer  land  to  private  ownership : 

"To  cause  water  to  flow  as  a  spring,  either  for  drinking  or  for 
watering  fields; 

"To  divert  water  from  submerged  tracts; 

"To  build  upon  uncultivated  ground; 

"To  make  a  plantation  thereon; 

"To  break  it  up  by  tillage; 

"To  clear  away  the  undergrowth  which  renders  it  unfit  for  culti- 
vation ; 

"  To  level  the  ground  and  remove  stones  therefrom." 

By  the  operation  of  these  laws  in  Algeria  and  Java,  collective 
property  in  land  in  these  countries  is  even  now  of  great  importance. 
On  the  other  hand,  in  France  there  are  fifty  million  acres  of  dead 
land ;  this  is  two-fifths  of  the  area  of  France,  and  of  this  only  fifteen 
miUion  acres  belong  to  the  state  and  to  the  various  communes. 
Holland  does  not  sell  its  colonial  lands  but  leases  them  for  periods 
of  seventy-five  years.  In  China,  all  land  left  tenantless,  either 
through  failure  of  heirs,  or  by  abandonment,  reverts  to  the  govern- 
ment. Anyone  may  cultivate  it,  and  then  apply  to  the  magistrate 
for  full  property  rights  in  it.  These  are  granted  unless  the  original 
owner  will  resume  cultivation.  See  Jernigan,  China  in  Law  and  Com- 
merce, p.  135.    All  of  this  note  is  according  to  Gide. 

"  P.  287.  This  Royal  Commission  on  Coast  Erosion  and  Affor- 
estation recommended  that  "a  clear  right  of  passage  by  foot  on  all 
foreshores  in  the  United  Kingdom,  whether  crown  property  or 
not,  should  be  conferred  on  the  Public,  in  addition  to  the  rights  of 
navigation  and  fishing  which  they  already  possess,"  and  further 
recommended  as  regards  the  public  use  of  the  foreshore  for  such 
purposes  as  "bathing,  riding,  driving  and  collecting  seaweed,  etc. 
that  the  Board  of  Trade  should  be  empowered  by  order,  after  a  local  ' 
inquiry,  if  necessary,  to  define  such  public  use  and  its  extent  in 


A  DISCUSSION  OF  THE  KINDS  OF  PROPERTY       293 

localities  where  it  may  be  desirable  in  the  public  interest,  that  it 
should  be  exercisable."  See  art.  "Gains  and  Losses  on  the  Coast," 
in  Country  Life  (England),  July  1,  1911;  also  Third  and  Final  Re- 
port of  the  Royal  Commission  on  Coast  Erosion  and  Afforestation, 
Vol.  Ill,  Ft.  I  (1911)  for  a  fuller  discussion  of  the  same. 

"  P.  287.  In  laying  out  to^vnships  in  the  province  where  there  are 
navigable  rivers  and  large  lakes,  an  allowance  of  four  rods  is  reserved 
around  the  shore.  Some  departure  from  this  practice  is  made  in 
the  case  of  laying  out  islands  for  pleasure  and  parks  and  summer 
resorts,  but  in  such  cases  reservation  of  free  access  is  specified  in 
all  patents.  Under  the  Mining  Act  of  Ontario,  section  52,  subsec- 
tion 3,  it  is  provided  that  "wherever  a  claim  includes  land  covered 
with  water  there  may  be  reserved  to  the  Crown  the  surface  rights 
in  a  strip  of  land  along  the  shore  66  feet  in  perpendicular  width  from 
the  water's  edge,  and  such  other  rights  of  access  and  passage  to, 
from  and  over  the  water  as  to  the  Minister  may  seem  desirable." 
Communication  to  the  writer  from  Honourable  Aubrey  White, 
Deputy  Minister  of  Lands  and  Forests,  Province  of  Ontario,  Novem- 
ber 26,  1912. 

12  P.  287.  Section  34,  Subsection  3,  of  the  Expropriation  Act, 
Chap.  143  of  the  Revised  Statutes  of  Canada  stipulates  as  follows: 

"Any  portion  of  the  shore  or  bed  of  any  public  harbour  vested 
in  His  Majesty,  as  represented  by  the  Government  of  Canada,  not 
required  for  public  purposes,  may  on  the  joint  recommendation 
of  the  Ministers  of  Public  Works  and  of  Marine  and  Fisheries,  be 
sold  or  leased  under  the  authority  aforesaid." 

The  policy  of  the  Canadian  government  in  this  regard  is  to  give 
the  riparian  owner  first  consideration.  The  foreshore  abutting 
on  street-ends  is  always  reserved  for  the  use  of  the  municipality. 
In  all  cases  the  use  of  the  property  for  industrial  purposes  is  an  im- 
portant factor  in  the  consideration  of  such  apjilications.  For  this 
information  the  author  is  indebted  to  Honourable  A.  Johnston, 
Deputy  Minister  of  Marine  and  Fisheries,  Canada. 

"P.  287.  Sec  p.  95. 

i<  P.  287.  In  the  case  McCready  v.  Virginia,  94  U.  S.  391  (1876) 
at  p.  395,  the  United  States  Supreme  Court  upheld  the  power  of 
the  State  of  Virginia  to  prohibit  citizens  of  otlxer  States  from  plant- 
ing oysters  within  the  tide  waters  of  Virginia. 

"  P.  287.  See  Van  Hise,  The  Conservation  of  Natural  Resources 


294    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

in  the  United  States,  pp.  263-64,  in  which  is  discussed  the  importance 
of  the  sea  as  a  source  of  food  supply. 

"  P.  288.  A  further  discussion  will  be  found  in  that  part  of  this 
work  dealing  with  landed  property. 

"  P.  290.  From  another  point  of  view,  we  may  take  farm  land 
as  a  unit  and  we  have  a  classification  which  is  useful  from  many 
points  of  view.  Taking  the  farm  as  our  starting  point,  the  author 
offers  the  following  as  a  valuable  classification,  for  which  he  is  in- 
debted to  his  colleague,  Professor  Henry  C.  Taylor,  of  the  Uni- 
versity of  Wisconsin: 

(a)  Lands  used  for  building  sites,  lots,  etc. 

(b)  Tillage  lands. 

(c)  Permanent  meadows. 

(d)  Permanent  pastures. 

(e)  Forests. 

(f)  Waste  lands. 


CHAPTER  XII 

THE  GENERAL  GROUNDS  FOR  THE  MAINTENANCE  OF  PRI- 
VATE PROPERTY 

It  has  been  stated  that  private  property  has  been 
maintained  for  social  purposes.  Consequently,  this 
chapter  must  consist  of  a  discussion  of  the  social  pur- 
poses which  it  accomplishes  or  is  capable  of  accompUsh- 
ing.  The  limits  of  space  will  not  permit  an  exhaustive 
treatment  of  this  large  subject,  and  our  statement  of 
purposes  must  be  brief  and  general. 

What  has  already  been  said  leads  us  to  suppose  that 
not  all  useful  things  are  equally  suitable  to  be  the  ob- 
jects of  private  property.  We  can  divide  the  subject 
with  reference  to  the  kinds  of  useful  things  with  which 
we  are  concerned,  and  ask  whether  we  shall  have  free 
goods  or  property.  In  the  case  of  the  ocean  and  the 
great  American  lakes  between  Canada  and  the  United 
States,  it  is  decided  that  free  goods  are  desirable.  In 
the  case  of  certain  other  things  useful  and  valuable  we 
have  to  ask  whether  they  shall  be  property  or  free  goods, 
and  if  we  decide  that  property  is  desirable,  whether 
we  shall  have  private  or  public  property,  and  then  we 
can  go  through  the  various  classes  and  examine  each 
by  itself. 

We  compare  first  enjoyment  (consumption)  goods, 
and  capital  goods,  the  latter  not  existing  for  their  own 

295 


296    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

sake  but  for  the  sake  of  the  things  produced  by  them. 
We  have  not  the  same  basis  for  private  property  in  the 
one  case  as  in  the  other,  because  capital  exists  for  the 
sake  of  the  enjoyment  goods.  We  ask,  then.  What  effect 
does  private  property  or  pubhc  property  in  capital  have 
upon  the  use  of  enjoyment  goods?  Then  we  must  make 
a  subdivision  such  as  we  have  made  between  those  which 
can  be  used  collectively  and  those  which  can  be  used 
individually, — on  the  one  hand  pleasure-grounds,  art 
galleries,  and  the  shelter  of  the  home,  which  can  to  a 
limited  extent  be  used  collectively,  on  the  other  hand 
food,  clothing,  etc.,  which  are  used  individually. 

We  will  not  in  this  chapter  enter  upon  an  exhaustive 
discussion  of  private  property  from  all  the  standpoints 
indicated,  although  we  will  bear  them  in  mind  and  have 
something  to  say  of  the  various  kinds  of  property;  or 
to  speak  more  accurately,  the  various  kinds  of  goods 
considered  with  respect  to  property.  In  another  part 
of  this  general  work  something  more  nearly  approaching 
an  exhaustive  treatment  of  land  will  be  given. 

Two  general  points  of  view  must  be  borne  in  mind 
when  we  ask  what  are  the  grounds  for  the  maintenance 
of  private  property. 

A.  If  we  had  not  to  consider  the  past,  but  were  mak- 
ing a  beginning  now  without  any  past  to  bind  us,  then 
we  must  ask.  What  social  purposes  does  private  prop- 
erty subserve? 

B.  But  no  practical  application  of  general  principles 
is  safe  until  the  present  has  been  brought  into  relation 
with  all  the  past  out  of  which  it  has  grown.  Conditions 
of  time  and  place  must  be  considered.    Nevertheless, 


WHY  PRIVATE  PROPERTY  IS  MAINTAINED         297 

this  point  of  view,  which  has  been  so  properly  empha- 
sised by  economists  of  the  historical  school,  in  opposi- 
tion to  the  unhistorical  absolutism  of  eighteenth  century 
social  philosophy,  may  push  us  too  far;  for  in  some 
treatments  it  appears  to  carry  with  it  a  fatalistic  justi- 
fication of  whatever  is,  and  suggest  that  no  country  has 
any  great  lessons  to  learn  from  others, — a  bigoted  Phil- 
istinism which  is  anything  but  scholarly.  In  their  eco- 
nomic life  modern  nations  more  and  more  closely  resem- 
ble each  other;  the  institutions  of  one  country  follow, 
more  or  less  rapidly,  similar  economic  institutions  else- 
where. And  the  past  must  not  forever  bind  us  and 
fetter  us.  It  must  suggest  caution  and  a  painstaking 
consideration  of  ways  and  means. 

Then  furthermore,  and  in  close  connection  with  the 
foregoing,  we  must  in  our  examination  have  regard  to 
the  stage  of  evolution  which  has  been  reached  in  the 
part  of  the  world  for  which  the  examination  is  con- 
ducted. In  one  stage  private  property  for  some  kinds  of 
goods  would  be  the  sort  most  desirable,  while  in  a  later 
stage  public  property  would  be  better.  Consider  the 
uncivilised  blacks  of  Africa.  They  have  not  reached  a 
condition  which  will  admit  of  any  great  amount  of  pub- 
lic property.  In  uncivilised  parts  of  the  world  generally 
public  property  must  be  limited  sharply  either  because 
men  are  so  ignorant  or  so  dishonest  or  because  the  con- 
ditions for  the  proper  administration  of  public  property 
are  wanting.  But  when  a  less  civilised  country  is  under 
the  protection  and  tutelage  of  a  more  highly  civilised 
one,  public  property  may  be  preferable,  under  the  ad- 
ministration of  the  more  advanced  country,  to  private 


298     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

property  of  some  sorts  which  would  carry  with  them 
grave  dangers  of  exploitation. 

Also,  in  less  advanced  stages  of  civilisation  such  as 
that  found  in  the  Phihppine  Islands,  it  is  quite  possible 
that  what  is  wanted  is  neither  private  property  nor 
public  property  but  something  preceding  full  property, 
namely,  some  development  of  common  property;  and 
it  may  be  that  in  the  United  States  a  mistake  has  been 
made  in  not  considering  exhaustively  all  the  possibilities 
in  this  direction  before  passing  over  to  property  in  sev- 
eralty for  the  Indians. 

Let  us  now  not  attempt  a  treatment  of  property  with 
respect  to  stages  of  evolution,  but  consider  in  a  general 
way  the  modern  nation. 

What  social  purposes  does  private  property  sub- 
serve? It  is  our  motives  which  make  the  wheels  of  in- 
dustry go  round.  We  have  a  desire  to  acquire  private 
property,  and  this  desire,  which  is  universal,  leads  to 
activity  in  acquisition,  and  this  activity  in  acquisition 
leads  to  production  because  production  for  most  men  is 
the  means  of  acquisition.  We  wish  to  satisfy  our  wants. 
Through  production  we  can  satisfy  our  wants  because 
through  it  we  reach  property. 

We  may  also  take  notice  under  this  head  of  the  joy 
of  property  ^  as  one  great  motive  for  production;  the 
delight  of  owning  and  of  doing  substantially  as  one  wills 
with  one's  own;  the  pleasure  of  building,  repairing,  and 
refitting  a  home  to  suit  one's  taste;  the  satisfaction  of 
making  the  last  payment  on  one's  house  and  feeling 
that  it  is  "all  one's  own. "  Ownership  is  a  source  of  hap- 
piness and  a  stimulus  to  industry.    It  acts  as  a  social 


WHY  PRIVATE  PROPERTY  IS  MAINTAINED         299 

force  favouring  production  precisely  in  proportion  as 
there  is  a  wide  way  open  to  success  in  this  respect.  And 
because  in  the  United  States  in  the  past  the  resources 
have  been  so  great  and  the  population  comparatively 
small,  there  has  been  a  wide  way  open  to  success  in  this 
direction,  and  consequently  we  have  had  an  immense 
stimulus,  such  as  the  world  has  never  seen  before,  to  the 
accumulation  of  wealth. 

It  is  perhaps  landed  property  particularly  which 
serves  as  a  stimulus  to  the  accumulation  of  property. 
Land  in  itself  is  not  a  product.  That  is  found  ready- 
made.  But  the  desire  to  secure  land,  even  a  city  build- 
ing lot  upon  which  no  work  has  been  put  by  any  human 
being,  serves  as  a  stimulus.  The  land  of  the  country  in 
a  certain  way  acts  as  a  savings  bank.  Property  is  ac- 
cumulated and  the  individual,  as  it  were,  puts  it  into 
the  land  where  it  is  stored  up  to  be  got  out  again  in  re- 
turn for  the  land,  provided  land  maintains  its  value; 
and  in  a  progressive  community,  on  the  whole,  land  in- 
creases in  value  rather  than  falls  in  value.  While  land 
is  an  individual  and  not  a  social  savings  bank,  as  a  stim- 
ulus to  savings,  private  property  in  land  adds  to  so- 
cial wealth.  Through  the  purchase  of  land  many  young 
men  make  their  beginning.  It  is  the  general  mode  of 
the  acquisition  of  property  by  professional  men  in  the 
United  States.  They  purchase  a  little  land  and  when 
they  have  paid  for  that  they  purchase  more,  until  they 
accumulate  a  competence.  It  is  the  testimony  of  a 
great  many  men  who  have  acquired  wealth  that  it  was, 
in  the  first  instance,  through  land  that  they  received  a 
start. 


300    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Certainly  within  limits,  the  inequalities  of  property 
serve  as  a  stimulus.  We  could  not  have  a  large  and  sat- 
isfactory production  of  wealth  without  having  inequal- 
ity. We  desire  first  to  supply  our  material  wants,  and 
then  we  try  also  to  equal  others  who  are  ahead  of  us,  or 
perhaps  try  to  outstrip  them.  We  see  that  others  have 
more  than  we  have,  and  we  say,  "Why  cannot  we  have 
more  as  well?  "  and  we  are  stimulated  to  put  forth  new 
energies.  Inequality  affords  the  greatest  stimulus  when 
there  are  gradual  gradations  in  wealth  throughout  the 
community.  The  ordinary  man  does  not  feel  the  stim- 
ulus of  the  wealth  of  somebody  who  has  a  thousand 
times  as  much  as  he  has.  Very  likely  if  there  were  no 
one  between  them  he  would  feel  discouraged  and  dis- 
heartened. But,  on  the  other  hand,  he  feels  strongly  im- 
pelled by  the  desire  to  accumulate  as  much  as  one  who 
has  a  little  more  than  he,  with  whom  he  comes  in  con- 
tact. He  will  see  that  another  family  is  a  little  better  off 
and  has  certain  comforts  which  his  own  has  not,  and  he 
will  try  to  get  these  comforts  and  conveniences.  Thus 
it  is  true  that  within  Hmits  inequality  of  property  does 
serve  as  a  stimulus.^ 

Under  production  we  notice  the  care  and  excellence  in 
the  management  of  valuable  things  brought  about  or  en- 
couraged by  property.  The  proprietor,  it  is  said,  gener- 
ally takes  better  care  of  his  things  than  anyone  else, 
and  makes  better  use  of  the  instruments  of  production 
which  are  at  his  disposal.  Consequently  things  are 
handed  over  to  children  to  be  their  own,  in  order  that 
they  may  learn  to  take  care  of  them,  and  we  have  the 
idea  of  exclusive  control.    Ownership  of  property  cul- 


WHY  PRIVATE  PROPERTY  IS  MAINTAINED         301 

tivates  care.  This  tendency  is  shown  by  the  difference 
in  the  cultivation  of  farms  which  are  rented  and  those 
which  are  owned,  a  difference  which  can  be  noticed  both 
in  America  and  Europe.  Arthur  Young,  in  the  eight- 
eenth century,  spoke  about  ''the  magic  of  property", 
which  turned  sand  into  gold;  he  had  in  mind  small  far- 
mers who  out  of  a  farm  of  sand  would  produce  a  fer- 
tility which  would  bring  them  gold.  Rented  houses, 
furnished  and  unfurnished,  also  afford  illustration  of  the 
general  principle;  for  in  the  present  condition  of  the 
social  conscience  one  cannot  always  build  as  good  a 
house  to  let  as  to  live  in.  But  if  people  have  themselves 
owned  valuable  homes,  fine  furniture,  etc.,  then  they 
are  likely  to  take  better  care.  Ownership  has  thus  a 
valuable  educational  value. ^ 

In  the  third  place  we  notice  in  connection  with  prop- 
erty that  ownership  is  connected  with  the  development 
of  personality.  Private  property  gives  one  a  sphere  of 
action,  accompanied  with  responsibility.  It  gives,  as 
it  were,  room  or  space  within  which  personality  can  be 
cultivated.  As  a  matter  of  fact,  it  is  often  through 
ownership  of  property  that  personality  is  cultivated  and 
developed. 

Through  ownership  of  property  personal  liberty  is 
protected,  and  that  assists  in  the  development  of  per- 
sonality. Individual  property,  it  has  been  said,  is  the 
expression  of  personal  liberty  and  its  protection. 

Mrs.  Humphrey  Ward  in  her  novel  Sir  George  Tres- 
sady  says: 

"To  both,  possession — private  and  personal  possession — 
from  the  child's  first  toy  or  the  tiny  garden  where  it  sows  its 


302     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

passionately  watched  seeds,  to  the  great  busmess  or  the  great 
estates,  is  one  of  the  first  and  chiefest  elements  of  human 
training,  not  to  be  escaped  by  human  effort,  or  only  at  such 
cost  of  impoverishment  and  disaster  that  mankind  would 
but  take  the  step,  supposing  it  conceivable  that  it  should 
take  it,  to  retrace  it  instantly"  (p.  141). 

This  shows  the  advantages  of  property  in  human 
training.     Another  writer  uses  these  words: 

"Private  property  is  realised  liberty.  It  is,  in  its  first 
idea,  the  guarantee  to  an  individual  person  of  what  has  been 
wrought,  through  the  exercise  of  his  personality,  by  labour 
and  abstinence.  It  is  essential  to  the  development  and 
maintenance  of  personality  in  this  work-a-day  world.  It  is 
requisite  for  the  very  existence  of  the  family.  But  Socialism, 
even  in  its  mildest  type,  means  the  confiscation  of  private 
property,  the  destruction  of  the  family,  and  the  annihilation 
of  individual  freedom."'^ 

Of  course  this  last  is  a  strong  expression,  which  the 
socialists  would  not  admit.  They  say  that  they  do  not 
desire  the  confiscation  of  private  property,  or  its  abo- 
lition, but  rather  its  firmer  establishment  so  far  as  en- 
joyment goods  are  concerned. 

Booker  T.  Washington  often  speaks  of  the  advan- 
tages of  private  property  to  the  negro  in  his  develop- 
ment. In  his  report  of  the  Fifth  Annual  Conference 
(Tuskegee  Negro  Conference),  he  says: 

"We  may  have  many  things  to  discourage  and  disappoint 
us,  but  I  believe  if  we  do  our  duty  in  getting  property.  Chris- 
tian education,  and  character,  in  some  way  or  other  the  sky 
will  clear  up,  and  we  shall  make  our  way  onward."  ^ 

Also  notice  this  by  a  careful  observer: 

"The  man  who  owns  a  house  and  is  in  possession  of  the 


WHY  PRIVATE  PROPERTY  IS  MAINTAINED         303 

elements  by  which  he  is  sure  of  making  a  living  has  a  great 
aid  to  a  moral  and  religious  life."  ^ 

In  the  fourth  place,  and  under  the  head  of  distribu- 
tion perhaps  rather  than  under  the  head  of  production, 
we  notice  this  advantage,  the  use  of  private  property 
for  the  development  and  satisfaction  of  higher  social 
needs.  The  few  always  go  ahead  of  the  many  and  they 
light  the  way  of  progress.  The  ownership  of  property 
with  inequalities  of  property  makes  it  possible  for  them 
to  encourage  social  development  along  various  lines. 
This  means  a  great  deal  and  would  mean  still  more,  if 
those  who  had  considerable  property  were  always  the 
same  ones  as  those  who  desire  the  development  and 
satisfaction  of  higher  social  needs.  But  it  is  possible 
for  even  a  few  people  with  large  means  to  do  so  much 
for  the  development  of  society  along  certain  desirable 
lines  that  we  have  here  a  strong  arg-ument  for  private 
property.  Take  the  case  even  of  freedom.  The  few  can 
protect  freedom  by  the  use  of  their  property  in  cases  in 
which  the  majority  care  little  for  freedom.  The  few 
who  appreciate  the  existence  of  certain  higher  needs,  of 
certain  studies,  for  instance,  which  do  not  appeal  to  the 
masses,  can  encourage  their  cultivation  by  endowment 
through  public  or  private  institutions.  If  in  the  public 
schools  certain  lines  of  work  are  not  sufficiently  appre- 
ciated, some  one  with  means,  if  he  realises  this,  can  say, 
"Here  are  certain  lines  of  work  which  are  not  appreciated 
as  it  seems  to  me  they  should  be;  I  will  myself  bear  the 
expense  of  making  these  lines  of  work  effective,  either 
temporarily  or  permanently."  In  this  way  improve- 
ments will  be  made.     Thus  considerable  amounts  of 


304     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

property  in  the  hands  of  some  private  individuals  make 
it  possible  for  them  to  assist  in  the  development  of  soci- 
ety along  certain  desirable  lines,  bringing  about  the  de- 
velopment and  satisfaction  of  higher  social  needsJ 

Fifth.  But  a  still  more  general  and  fundamental 
consideration  is  this, — that  private  property  is  the  ce- 
ment of  society;  it  binds  men  together.  One  Scotch 
writer,  Sir  James  Mackintosh,  speaks  of  property  as  a 
''nourisher  of  mankind,  the  incentive  to  industry,  the 
cement  of  human  society."  ^  The  protection  and  de- 
velopment of  property  bring  men  together  and  unite 
them.  We  can  see  that  in  business  partnerships  and 
corporations,  in  industrial  organisations.  Private  prop- 
erty brings  men  together  in  large  cooperative  associa- 
tions. Lieber  says  in  his  Political  Ethics  (p.  112)  that 
'^property  is  the  surest  and  firmest  bond  of  society." 
According  to  Professor  Trent, ^  slavery  was  the  cement, 
and  practically  the  only  cement,  binding  together 
the  South  as  a  distinct  section  before  our  Civil  War. 
But,  on  the  other  hand,  slavery  separated  the  South 
from  the  rest  of  the  country  and  so  caused  social  dis- 
union as  well.  Private  property  then  can  be  a  social 
cement  or  it  can  be  a  social  disorganiser.  When  the 
property  objects  are  not  the  things  over  which  the  rights 
of  property  ought  to  be  extended,  then  it  may  serve  as 
a  source  of  social  disintegration.  Also  when  unwisely 
distributed  property  may  divide  class  from  class. 

Finally,  we  may  notice  in  the  effort  and  self-denial 
necessary  to  acquire  and  increase  property  a  stern  dis- 
cipline in  character;  this  same  effort  and  self-denial  may, 
on  the  other  hand,  lead  to  degradation  and  disease  of 


WHY  PRIVATE  PROPERTY  IS  MAINTAINED         305 

character  when  the  desire  of  acquisition  is  not  properly 
balanced  by  other  motives. 

We  have  spoken  in  a  very  general  way  about  the  pos- 
itive benefits  which  property  brings  to  us.  Only  in  the 
last  few  remarks  have  any  negative  considerations  been 
brought  forward. 

When  we  bring  the  past  into  connection  with  the 
present,  we  find  still  stronger  arguments  for  private 
property.  We  have  adjusted  ourselves  to  it;  it  has 
grown  up  during  thousands  of  years  of  human  history, 
and  corresponds  to  our  psychical  natures,  for  it  is  the 
outcome  of  these  natures  in  their  external  environment ; 
and  changes  must  be  considered  with  reference  to  our 
mental  make-up. 

Endowments  springing  out  of  the  past  must  be  crit- 
ically and  fairly  examined  before  we  proceed  to  radical 
changes  in  property  arrangements.  Endowments  have 
frequently  been  abused,  but  they  are  so  intimately 
bound  up  with  much  of  the  educational,  philanthropic, 
and  religious  life  of  the  world  that  grave  consequences 
would  follow  any  changes  which  would  annihilate  them. 
Changes  in  endowments  are  frequently  needed  and 
strong  arguments  for  social  control  can  be  adduced. 
This  is  not  the  place  for  a  discussion  of  endowments, 
the  aim  being  simply  to  point  to  them  as  among  the 
institutions  which  have  to  be  considered  in  a  discussion 
of  property. 


Notes  and  References  to  Chapter  XII 

^  P.  298.  Wonne  des  Besitzes,  to  use  a  German  term. 

2  P.  300.  J.  B.  McCulloch  supports  the  law  of  primogeniture  as 
found  in  England  on  the  ground  that  the  inequalities  produced 
by  it  stimulate  the  production  of  wealth.  Even  those,  who,  like  the 
present  author,  are  unwilling  to  accept  the  conclusion  that  primo- 
geniture is  on  the  whole  desirable,  cannot  fail  to  admit  the  strength 
of  his  arguments  and  to  grant  that  the  economic  history  of  England 
affords  a  substantiation  of  their  partial  truth.  Naturally  the  question 
should  be  asked,  what  other  arrangements  can  afford  the  stimu- 
lus of  primogeniture  without  its  evil.  See  McCulloch,  On  the 
Succession  to  Property  Vacant  by  Death,  Chap.  II,  "Influence  of  the 
Law  or  Custom  of  Primogeniture,"  pp.  27—42. 

3  P.  301.  In  this  respect  compare  public  and  private  ownership. 
It  is  a  humiliating  spectacle  to  see  abuses,  too  frequent,  of  public 
property.  Even  university  students,  who  should  stand  for  the 
higher  things,  have  been  known  to  be  guilty  of  making  ugly  cuts 
in  beautiful  mahogany  tables  in  a  reading  room  which  should  be 
their  pride  and  joy.  But  in  cases  like  this,  the  situation  is  not 
hopeless.  An  appeal  to  conscience  and  proper  administrative 
methods  generally  lead,  in  time,  to  better  things. 

^P.  302.  W.  S.  Lilly,  in  art.  "Illiberal  Liberalism,"  Fortnightly 
Review,  November,  1895. 

^  P.  302.  Report  not  published.  But  some  negro  leaders,  for 
example,  W.  E.  Burghardt  Dubois,  feel  that  Booker  T.  Washing- 
ton goes  too  far  and  exalts  property  at  the  expense  of  the  higher 
things  of  life. 

« P.  303.  Rev.  D.  Mayo,  LL.D.,  in  an  address  on  "The  Duty  of 
Educated  Negroes."  Report  of  the  U.  S.  Commissioner  of  Education, 
Vol.  1, 1898-9,  p.  1248. 

^  P.  304.  Socialists  employ  private  property,  that  is  gifts  of 
private  property,  for  their  agitation;  and  the  Progressives  in  the 
United  States  would  not  be  where  they  are  had  they  not  had  gifts 
from  men  of  wealth  to  aid  in  their  educative  work. 

*  P.  304.  Speech  in  the  Commons  on  the  Reform  Bill,  Miscel- 
laneous Works  (1868)  p.  586. 

sP.  304.  W.  P.  Trent,  Southern  Statesmen  of  the  Old  Regime,  p.  269. 

306 


CHAPTER  XIII 

A  CRITICAL  EXAMINATION  OF  THE  GENERAL  GROUNDS  FOR 
THE   MAINTENANCE    OF   PRIVATE    PROPERTY 

At  the  present  time  we  shall  make  only  a  cursory  re- 
view of  the  general  grounds  for  the  maintenance  of  pri- 
vate property.  Let  us  examine  some  of  the  more  mani- 
fest aspects  of  the  problem  of  property  which  suggest 
themselves  in  view  of  the  outline  presented  in  the  fore- 
going chapter.  We  shall  return  to  this  subject  in  con- 
nection with  the  development  of  property,  also  in  the 
examination  of  the  theories  of  property,  as  well  as  in 
some  other  parts  of  our  work.  We  now  take  only  a 
bird's  eye  view  of  the  subject. 

We  say  that  property  produces  such  and  such  bene- 
ficial effects.  But  does  property  produce  only  beneficial 
effects  if  large  amounts  are  in  single  hands?  We  are 
speaking  here  about  accumulated  propert}^,  not  so  much 
about  income.  What  is  the  position  of  men  without 
property,  especially  those  who  have  no  tools  of  their 
own  but  are  dependent  upon  others  for  the  tools  and 
implements  of  production?  These  are  called  the  Prol- 
etariat, a  name  which  naturally  enough  is  regarded  by 
those  belonging  to  this  class  as  having  a  most  unde- 
sirable suggestion. 

But  what  are  the  disadvantages  of  those  who  lack 

307 


308     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

property?  The  disadvantages  under  which  they  labour 
are  brought  out  by  a  consideration  of  the  advantages  of 
property  to  those  who  have  it.  First  of  all  we  mention 
the  lack  of  independence  which  goes  with  the  absence  of 
property.  One  who  has  not  accumulated  property  in- 
curs the  danger  that  he  will  become  dependent  upon 
others,  and  in  a  way  this  may  be  injurious  to  the  de- 
velopment of  his  personality.  We  have  the  saying  that 
a  year's  subsistence  is  the  price  of  one's  own  emancipa- 
tion; in  other  words,  a  man  is  not  free  until  he  has 
accumulated  a  year's  subsistence.  That  is  not  wholly 
true.  A  person  may  have  a  good  deal  of  independence 
although  he  has  almost  no  accumulated  property,  but 
he  certainly  incurs  danger  of  dependence. 

Without  a  certain  amount  of  accumulated  wealth,  a 
man  is  largely  a  slave  to  his  immediate  environment. 
He  cannot  move  to  another  place  though  conditions  of 
employment  there  are  much  more  favourable.  He  can- 
not travel  in  search  of  better  opportunities.  He  cannot 
secure  proper  treatment  in  a  long  case  of  illness  and  so 
is  likely  to  have  his  earning  power  seriously  diminished. 
He  cannot  cease  immediately  remunerative  effort  in 
order  to  obtain  education  or  training  which  will  better 
fit  him  for  future  usefulness  to  himself,  his  family,  and 
society.  He  cannot  take  vacations  or  pleasure  trips 
and  thus  renew  his  energies  and  invigorate  his  mind  and 
body.  He  cannot  readily  make  use  of  the  alternative  of 
going  into  business  as  an  independent  entrepreneur  and 
thus  escape  the  wage-earning  field,  for  he  has  not  money 
and  usually  lacks  credit.  He  cannot  by  investment 
share  in  the  general  opportunities  for  financial  gain. 


THE  BENEFITS  OF  PRIVATE  PROPERTY  309 

Second,  the  person  without  property  is  always  in 
danger  of  drifting  downward  in  the  social  scale.  Our 
present  organisation  of  society  recognises  accumulated 
property  as  the  common  safeguard  against  misfortune 
and  adversity.  In  case  of  continued  illness,  of  serious 
accident,  of  death  or  other  disaster,  the  propertyless 
must  appeal  to  charity  for  support.  The  humiliation 
resulting  from  such  an  appeal  almost  inevitably  tends 
towards  a  loss  of  self-respect,  a  weakening  of  the  moral 
fibre  and,  in  many  cases,  to  pauperisation.  Property, 
then,  under  present  conditions,  is  not  only  the  price  of 
progress  but  the  price  of  security. 

With  our  prevailing  system  of  taxation,  government 
is  largely  supported  by  the  property  owner.  As  a  result, 
voters  without  property  are  notoriously  careless  of  pub- 
lic waste  and  extravagance.  Graft  on  public  contracts, 
useless  bond  issues,  unnecessary  public  employees,  gen- 
eral mismanagement  too  often  go  uncondemned  if  some 
trifling  personal  gain  can  be  obtained  for  the  voter  by 
the  retention  in  power  of  the  guilty  officials.  This  is 
one  of  the  foundation  stones  upon  which  corrupt  polit- 
ical machines  rest.  The  property  owner  who  is  once 
made  to  see  that  the  burden  of  the  graft  or  waste  falls 
upon  his  shoulders  is  ordinarily  anxious  for  better  gov- 
ernment. 

Moreover,  in  so  far  as  property  furnishes  a  necessary 
sphere  of  development,  the  one  who  lacks  property 
lacks  that  sphere  of  development  which  comes  with 
ownership.  Then  the  question  to  be  asked  is  this, — 
Can  the  man  without  property  find  the  same  sphere  of 
development  in  the  use  of  the  tools  of  others?    He  does 


310    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

not  have  the  same  responsibility.  He  does  Dot  reap  the 
benefits,  to  the  same  direct  and  immediate  extent,  of 
energy  or  capacity  in  the  management  of  the  imple- 
ments of  production;  and  yet,  in  some  ways,  a  sphere 
of  development  is  provided  in  the  use  of  the  productive 
property  of  others. 

When  we  come  to  consider  very  large  amounts  of 
property,  we  find  that  they  do  not  always  produce  all 
the  beneficial  effects  which  have  been  attributed  to 
property.  Instead  of  sturdy  independence,  very  large 
amounts  of  property  may  produce  a  desire  or  inclina- 
tion towards  oppression  and  arrogance  and  may  culti- 
vate undue  pride.  There  is  a  great  danger  that  very 
large  amounts  of  property  may  lead  to  indolence — not 
so  much  on  the  part  of  those  who  have  accmnulated  the 
property  as  on  the  part  of  their  successors — and  also  to 
great  waste  and  extravagance.  But  when  these  large 
accumulations  do  fall  into  the  best  hands,  they  promote 
the  social  weal  and  have  vast  power  for  good. 

Let  us  examine  into  the  number  of  property  holders 
in  order  to  estimate  the  benefits  which  we  derive  from 
property.  What  is  the  number  of  property  holders,  and 
how  does  this  number  compare  with  the  number  of  non- 
property  holders?  This  gives  us  one  standpoint  of  crit- 
icism. Are  many  deprived  of  property,  and  how  do 
the  institutions  of  the  various  countries  compare  in 
their  action  upon  the  accumulation  of  wealth?  What 
is  the  relation  of  city  to  country,  and  the  influence  of 
each  upon  the  acquisition  of  property? 

Let  us  review  briefly  the  evidence  of  available  sta- 
tistics as  to  the  present  personal  distribution  of  wealth 


THE  BENEFITS  OF  PRIVATE  PROPERTY  311 

in  the  United  States,  the  United  Kingdom  of  Great 
Britain  and  Ireland,  France,  and  Prussia  in  order  to 
have  a  necessary  foundation  for  a  critical  examination 
of  the  general  grounds  for  the  maintenance  of  private 
property. 

In  the  United  States,  no  recent  extensive  study  of 
wealth  distribution  is  at  hand.  The  Massachusetts 
Bureau  of  Statistics  of  Labor  made  a  careful  investi- 
gation of  the  size  of  estates  of  decedents  in  that  common- 
wealth for  the  years  1889  to  1891  inclusive.  Unfortu- 
nately, no  inventories  were  filed  for  5,611  of  the  13,960 
estates  probated  during  this  period.  In  the  opinion  of 
the  investigators,  the  estates  for  which  no  inventories 
were  filed  were  probably  fully  as  large,  on  the  average, 
as  those  for  which  inventories  appear.^  If  we  assmne 
that  the  size  and  distribution  of  the  inventoried  and  non- 
inventoried  estates  were  the  same,  we  shall  probably 
attain  results  sufficiently  accurate  for  present  purposes. 
We  shall  further  assume  that  the  probated  estates  of 
males  were  all  estates  of  men  over  twenty-five  years  of 
age.  There  were  probated,  undoubtedly,  some  estates 
of  males  under  twenty-five  years  of  age,  but  the  number 
was  probably  insignificant.  The  errors  in  these  assump- 
tions are  not  likely  to  be  large  enough  to  vitiate  seriously 
the  results  for  the  purposes  for  which  they  are  here  used. 

In  1889,  there  were,  in  the  State  of  Massachusetts, 
11,722  deaths  of  males  over  twenty-five  years  of  age. 
The  death-rate  was  slightly  less  in  the  other  two  years 
of  the  period,  making  the  total  estimated  deaths  of 
males  over  twenty-five  years  of  age  33,740.  Of  these, 
only  13,960  had  estates  which  were  probated.     It  is 


312     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 


probable  that  a  very  small  percentage  of  the  remainder 
possessed  property  exceeding  five  hundred  dollars  in 
value.  With  these  assumptions,  the  distribution  of 
wealth  among  the  decedents  in  Massachusetts  in  the 
period  1889  to  1891  would  be  as  follows: 

ESTIMATED '  DISTRIBUTION  ACCORDING  TO  VALUE 
OF  ESTATES  OF  ALL  MEN  OVER  TWENTY-FIVE  YEARS 
OF  AGE  DYING  IN  MASSACHUSETTS  DURING  THE 
PERIOD  1889-1891  INCLUSIVE 


Percent- 

No. of 

Value  of 

Percentage 

age  of 

Size  of  Estate 

Estates  in 

Estates  in 

of  Total  No. 

Total 

Class 

Class 

of  Estates 

Value  of 
Estates 

Under  $500 

21,746 

4,000,000 

64.45 

2.06 

S        500  but  under  $     1,000 

1,467 

1,080,000 

4.35 

.56 

1,000         "                5,000 

5,716 

14,220,000 

16.95 

7.32 

5,000         "              10,000 

2,000 

14,040,000 

5.93 

7.22 

10,000         "              25,000 

1,611 

25,320,000 

4.77 

13.01 

25,000         "              50,000 

537 

18,710,000 

1.59 

9.62 

50,000         "            100,000 

335 

23,360,000 

.99 

12.01 

100,000         "            200,000 

176 

24,020,000 

.52 

12.37 

200,000         "            300,000 

59 

14,510,000 

.18 

7.47 

300,000         "            400,000 

28 

9,620,000 

.08 

4.95 

400,000         "            500,000 

18 

8,440,000 

.05 

4.34 

500,000  and  over 

47 

37,110,000 

.14 

19.07 

Total 
Average 


33,740 

Value  of  Estate  $5 


194,430,000 
,760. 


100.00    100.00 


A  later  study,  along  lines  similar  to  the  one  just  cited 
for  Massachusetts,  was  made  for  estates  probated  in 
1900  in  six  counties  of  Wisconsin,  by  Dr.  Max  Lorenz. 
By  making  assumptions  identical  with  those  used  for 
Massachusetts,  we  arrive  at  the  following  estimates  for 
the  distribution  of  wealth  among  male  decedents  over 
twenty-five  years  of  age  in  Wisconsin  in  1900. 


THE  BENEFITS  OF  PRIVATE  PROPERTY 


313 


ESTIMATED  *  DISTRIBUTION,  ACCORDING  TO  VALUE, 
OF  THE  ESTATES  OF  ALL  MEN  OVER  TWENTY-FIVE 
YEARS  OF  AGE  DYING  IN  THE  COUNTIES  OF  DANE, 
GRANT,  MANITOWOC,  MILWAUKEE,  RACINE,  AND 
WINNEBAGO  IN  THE  STATE  OF  WISCONSIN  IN  THE 
YEAR  1900 


Size  of  Estate 


Under  $500 

$      500  but  under  $     1,000 

1,000         "  2,500 

2,500         "  5,000 

5,000         "  7,500 

7,500         "  10,000 

10,000         "  15,000 

15,000         "  25,000 

25,000         "  50,000 

50,000         "  100,000 

100,000         "  500,000 

500,000  and  over 


Value  of 

No.  of 

Estates  in 

Per  Cent. 

Estates 

Class  in 

of  Total 

in 

Thousands 

Number  of 

Class 

of  Dollars 

Estates 

1,570 

471 

67.323 

74 

53 

3.174 

165 

286 

7.076 

161 

633 

6.904 

108 

607 

4.631 

75 

617 

3.216 

66 

788 

2.830 

50 

845 

2.144 

33 

1,116 

1.415 

12 

835 

.515 

16 

3,492 

.686 

2 

1,244 

.086 

Per  Cent. 

of  Total 

Value  of 

Estates 

4^29 

.48 

2.60 

5.76 

5.52 

5.62 

7.17 

7.69 

10.16 

7.60 

31.79 

11.32 


Total 

Average  Value  of 


2,322 

Estate  ' 


10,987 
1,710. 


100.000    100.00 


For  the  United  Kingdom,  an  annual  statement  of  the 
distribution  of  taxed  estates  appears  in  the  Statistical 
Abstract.  The  figures  for  estates  under  £500  are  some- 
what confused  and  no  record  is  kept  of  the  untaxed 
estates,  these  consisting  of  all  under  £100  in  value. 
Unfortunately,  no  report  is  made  as  to  the  division  of 
estates  between  males  and  females.  The  following 
table  has  been  computed  on  the  assumption  that  this 
division  is  in  the  same  ratio  as  in  Massachusetts.  The 
total  number  of  deaths  is  estimated  from  the  Reports 


314    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  the  Registrar  General  on  Births,  Deaths,  and  Marriages 
in  England,  Wales,  Scotland,  and  Ireland. 

In  order  to  secure  statistical  regularity,  the  figures  for  the  years 
1907  to  1911  inclusive  have  been  averaged  throughout. 

ESTIMATED  ^  DISTRIBUTION  OF  WEALTH  AMONG  MEN 
OVER  TWENTY-FIVE  YEARS  OF  AGE  DYING  IN  THE 
UNITED  KINGDOM.  FIGURES  AVERAGED  FOR  THE 
YEARS  1907-1911  INCLUSIVE 


Value  of 

Per 

Per 

No.  of  Es- 

Estates in 

Cent. 

Cent. 

Size  op  Estates 

tates  in 

Class  in 

of  Total 

of  Total 

Class 

Millions 

No.  of 

Value  of 

of  Pounds 

Estates 

Estates 

Less  than  £100 

162,311 

9.746 

'    79.23 

4.57 

£          100  but  under  £         500 

22,320 

7.72 

10.89 

3.62 

500 

1,000 

6,818 

6.75 

3.33 

3.17 

1,000 

10,000 

10,920 

47.56 

5.34 

22.31 

10,000       ' 

25,000 

1,478 

30.12 

.72 

14.13 

25,000 

50,000 

548 

24.67 

.27 

11.57 

50,000 

75,000 

180 

13.82 

.09 

6.48 

75,000 

150,000 

162 

21.15 

.08 

9.92 

150,000       ' 

250,000 

55 

13.08] 

6.13 

250,000 

500,000 

32 

14.45 

.05 

6.78 

500,000 

1,000,000 

11 

9.96 

4.67 

1,000,000  and  over 

5 

14.19 

6.65 

Total 


204,840      213.21       100.00    100.00 


Of  all  large  nations,  France  apparently  furnishes  us 
the  most  complete  record  of  estates.  Practically  all  of 
the  estates  of  adults  are  probated.  We  shall,  therefore, 
simply  quote  the  figures  given  in  the  Annuaire  Staiis- 
tique  for  1910,  p.  221.  Percentages  have  been  computed 
therefrom  and  added  to  the  table. 


THE  BENEFITS  OF  PRIVATE  PROPERTY 


315 


DISTRIBUTION,   ACCORDING  TO  VALUE  OF  ESTATES 
PROBATED  IN  FRANCE  IN  1909 


Value  of 

No.  of 

Estates  in 

Per  Cent,  of 

Per  Cent. 

Size  of  Estate 

Estates  in 

Class  in 

Total  No.  of 

of  Total 

IN  Francs 

Class 

Millions  of 
Francs 

Estates 

Value  of 
Estates 

Excess  of  debts 

13,897 

3.533 

1  to              500 

103,438 

26.96 

26.301 

.470 

501  "           2,000 

101,178 

129.94 

25.722 

2.264 

2,001  "         10,000 

110,427 

543.25 

28.076 

9.464 

10,001  "         50,000 

48,755 

1,026.51 

12.396 

17.881 

50,001  "        100,000 

7,692 

529.56 

1.956 

9.224 

100,001   "        250,000 

4,822 

758.74 

1.226 

13.218 

250,001   "        500,000 

1,720 

605.66 

.437 

10.551 

500,001   "     1,000,000 

810 

554.40 

.206 

9.658 

1,000,001   "     2,000,000 

373 

512.17 

.095 

8.922 

2,000,001   "     5,000,000 

145 

425.61 

.037 

7.414 

5,000,001  "  10,000,000 

46 

303.30 

.012 

5.284 

10,000,001  "  50,000,000 

10 

179.941 
144.40 j 

.003 

3.135 

50,000,001  and  over 

2 

2.515 

Total 


393,315      5,740.44 


100.000  100.000 


Prussia  levies  an  income  tax  based  on  the  amount  of 
wealth  of  each  family.  This  gives  a  basis  for  ascer- 
taining approximately  the  distribution  of  wealth  among 
the  families  of  that  kingdom.  The  following  table  is 
principally  quoted  from  Professor  Taussig. 


316     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 


ESTIMATED  '  DISTRIBUTION  OF  WEALTH  AMONG  PRUS- 
SIAN FAMILIES  FOR  THE  YEARS  1908-1910  INCLUSIVE 


Amt.  of 

No.  of 

Wealth  of 

Per  Cent. 

Per  Cent. 

Family  Wealth 

Families 

Class  in 

of  Total 

of  Total 

IN  Marks 

in  Class 

Millions 

Number  of 

Amount 

of  Marks 

Families 

of  Wealth 

Less  than 

6,000 

8,600,000 

21,930 

85.127 

20.84 

6,000  but  under 

20,000 

731,700 

9,510 

7.243 

9.04 

20,000 

32,000 

262,300 

6,140 

2.596 

5.84 

32,000 

52,000 

203,800 

7,700 

2.017 

7.32 

52,000 

100,000 

160,500 

10,590 

1.589 

10.06 

100,000 

200,000 

79,900 

11,030 

.791 

10.47 

200,000 

500,000 

43,400 

13,670 

.430 

12.99 

500,000 

1,000,000 

12,600 

8,520 

.125 

8.10 

1,000,000 

2,000,000 

5,300 

7,150 

.052 

6.79 

2,000,000  and  over 

3,000 

9,000 

.030 

8.55 

Total 


10,102,500     105,240     100.000     100.00 


In  a  progressive,  democratic  country  the  estates  of 
decedents  are  ordinarily  larger  on  the  average  than  the 
possessions  of  those  living  in  the  community,  simply 
because  those  who  die  average  considerably  older  than 
those  left  alive  and  hence  have  had  more  time  to  accu- 
mulate wealth.  On  the  other  hand,  wealth  is  distrib- 
uted among  families  rather  than  among  individuals. 
In  Massachusetts,  37.9  per  cent,  of  the  number,  and 
26.7  per  cent,  of  the  value  of  all  estates  probated  be- 
longed to  women.  In  France,  apparently,  a  still  larger 
percentage  of  estates  belonged  to  females.  These  women 
are,  in  most  instances,  members  of  families  and  their 
possessions  must  be  taken  into  account  in  estimat- 
ing the  family  wealth.  The  statistics  apparently  in- 
dicate that,  in  England  and  Prussia,  women  own  a 
smaller  percentage  of  estates  than  in  America.     In 


THE  BENEFITS  OF  PRIVATE  PROPERTY  317 

those  countries  accumulation  is  also  slower  than  in 
America.  In  France,  the  country  in  which  the  women 
apparently  own  the  largest  percentage  of  the  estates,  the 
people  are  noted  for  their  thrift.  The  women,  however, 
probably  own  relatively  small  amounts  of  property. 
Taken  on  the  whole,  therefore,  it  seems  fairly  safe,  in 
each  of  the  countries  mentioned,  to  offset  the  estates 
of  women  against  the  probable  excess  of  the  estates  of 
the  dead  over  those  of  the  living;  and  to  assume  that 
the  distribution  of  probated  estates  is  approximately 
representative  of  wealth  distribution  among  living 
families.  This  will,  of  course,  be  only  a  rough  approx- 
imation and  will  affect  to  some  extent  the  correctness 
of  the  figures  for  the  absolute  amount  of  wealth  in  each 
class  of  families.  It  should,  however,  vitiate  but  slightly 
the  accuracy  of  the  figures  showing  the  relative  shares 
of  wealth  held  by  the  different  percentages  of  the  fami- 
lies when  these  are  arranged  in  order  according  to  the 
amount  of  wealth  possessed. 

The  benefits  of  private  property  are  secured  in  part 
by  a  comparatively  limited  amount  of  wealth.  Less 
than  five  hundred  dollars  cannot,  however,  in  normal 
cases,  be  considered  sufficient  to  add  greatly  to  indi- 
vidual independence,  but  the  family  possessing  from 
$500  to  $2,000  has  its  freedom  of  action  largely  in- 
creased and  its  security  in  times  of  adversity  greatly 
enhanced.  We  usually  speak  of  those  families  having 
wealth  ranging  from  $2,000  to  $50,000  as  the  middle 
class.  They  may  be  said  to  receive  most  of  the  benefits 
of  private  property  in  so  far  as  it  gives  freedom  and  se- 
curity and  they  may  also  engage  in  small  business  under- 


318    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

takings  of  their  own.  These  people  suffer  httle  from  the 
evil  effects  of  over-accumulation  since  they  have  too 
little  to  permit  of  permanent  indolence  or  great  extrav- 
agance and  luxury.  This  amount  of  property  seems, 
therefore,  in  many  respects  to  satisfy  our  ideals. 


The  following  table  shows  approximately  the  percentage  of  fam- 
ilies in  each  country  included  in  each  of  these  broad  wealth  classes. 

APPROXIMATE  PERCENTAGES  OF   THE   FAMILIES  OF 
DIFFERENT  COUNTRIES  IN  EACH  GENERAL  WEALTH 

CLASS  8 


Wealth  op 
Family 

Less  than  $      500 

$    500  to      2,000 

2,000   "     50,000 

Over  50,000 

Total 


Massachu- 
setts 

Wisconsin 

i  United 
Kingdom 
1909 

France 

1890 

1900 

1909 

64 

67 

79 

60 

11 

8 

9 

24 

23 

24 

11 

15 

2 

1 

1 

1 

Prussia 

1909 

75 

13 

11 

1 


100 


100 


100 


100 


100 


An  examination  of  the  table  reveals  the  fact  that,  in 
no  one  of  the  given  countries,  does  a  larger  fraction 
than  two-fifths  of  the  people  possess  any  considerable 
amount  of  property.  In  England,  in  fact,  nearly  four- 
fifths  of  the  families  own  less  than  £100,  and  Mr.  Chi- 
ozza  IVIoney  ^  would  make  the  percentage  of  property- 
less  families  even  greater.  The  small  property  owners 
constitute  nearly  a  fourth  of  the  families  of  France,  but 
only  about  a  tenth  of  the  families  of  the  other  nations. 
The  middle  class  in  which  the  maximum  benefits  of  pri- 
vate property  are  supposed  to  be  exemplified  forms  ap- 
proximately one-fourth  of  the  American  population, 
but  only  about  one-seventh  of  the  people  of  France  and 


THE  BENEFITS  OF  PRIVATE  PROPERTY  319 

one-ninth  of  the  inhabitants  of  Prussia  and  the  United 
Kingdom  may  be  grouped  under  this  head. 

The  tables  previously  quoted  reveal  the  fact  that  a 
surprisingly  large  share  of  the  wealth  of  the  world  is 
collected  into  a  few  hands.  The  percentages  of  families 
owning  one-half  of  the  wealth  of  the  respective  States 
and  countries  are  about  as  follows: 


Massachusetts 

1.0 

Wisconsin 

1.2 

United  Kingdom 

.4 

France 

.8 

Prussia 

1.7 

The  above  figures  show  a  striking  degree  of  concen- 
tration of  private  property  in  the  hands  of  a  very  small 
fraction  of  the  population.  This  is  not  in  itself  a  de- 
sirable distribution  of  property. 

A  great  difference  in  the  relative  number  of  property 
owners  between  city  and  country  in  this  respect  is  obvi- 
ous in  the  United  States  and  was  shown  conclusively  by 
the  late  Dr.  Charles  B.  Spahr  in  his  book  The  Present 
Distribution  of  Wealth  in  the  United  States.  In  the  coun- 
try the  number  of  property  owners  was  comparatively 
large  and  in  cities  it  was  small.  In  New  York  City  less 
than  one-third  of  the  families  owned  any  registered 
property  whatever,  while  in  five  agricultural  counties  in 
New  York,  having  no  town  of  over  four  thousand, 
nearly  three-fourths  owned  registered  property,  ^°  and 
even  the  remaining  one-fourth  had  some  personal  ef- 
fects. Many  of  them  were  tenants,  but  owned  perhaps 
a  couple  of  horses,  wagons,  a  cow,  or  something  of  that 
nature. 


320    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

But  other  considerations  must  be  adduced.  One 
of  these  is  the  benefit  society  derives  from  the  institu- 
tion of  property  as  a  stimulus  to  propertyless  persons 
to  accumulate  property.  To  what  extent,  we  may  ask, 
does  this  happen?  To  some  extent,  certainly,  because 
we  find  persons  passing  from  one  class  to  the  other.  It 
depends  upon  many  conditions.  It  depends,  for  one 
thing,  upon  age  and  the  opportunities  that  are  found 
for  investment,  also  upon  the  training  and  education  of 
the  population  and  its  character  with  respect  to  energy, 
capacity,  ambitions.  One  of  the  most  important  con- 
siderations, frequently  overlooked,  is  the  question  of  age. 
Where  sufficient  opportunities  exist  and  where  men  and 
women  are  properly  trained  to  utiHse  these  opportuni- 
ties, it  is  no  hardship  for  able-bodied  young  people  to  be 
without  property;  particularly  if  they  have  homes  as  a 
place  of  refuge  in  time  of  temporary  illness  and  inca- 
pacity. When  from  our  present  point  of  view  we  com- 
pare one  country  with  another  or  one  section  of  a  coun- 
try with  another,  we  must  attach  great  weight  to  the 
distribution  of  the  population  in  age  groups.  A  State 
in  the  western  part  of  the  United  States  where  the  aver- 
age age  indicates  that  the  people  are  largely  young 
adults,  could  be  in  an  excellent  condition  as  to  property 
and  its  distribution,  although  the  average  accumulation 
might  be  very  small. 

With  respect  to  opportunities  for  investment  we  ob- 
serve the  difference  between  the  city  and  the  country. 
In  New  York  City  the  opportunities  for  investment  in 
land  are  comparatively  few  for  the  person  of  small 
means,  because  a  great  deal  of  money  is  there  required 


THE  BENEFITS  OF  PRIVATE  PROPERTY  321 

to  purchase  even  a  single  lot,  and  real  estate  is  the  in- 
vestment which,  as  a  rule,  is  most  suitable  to  the  work- 
ingman  both  with  respect  to  his  ability  to  judge  it  in- 
telligently and  with  respect  to  safety  and  return  on  the 
investment.  Favourable  opportunities  in  New  York 
are  open  to  only  a  few,  and  comparatively  few  accu- 
mulate property  there.  ^^  But  in  the  country  villages 
in  America  the  workman  earning  but  $2  a  day  may  hope 
to  accumulate  some  property.  He  can  buy  a  village 
lot  and  gradually  pay  for  it  and  build  a  house,  mort- 
gaging the  ground  for  the  money  to  build  the  house. 
The  author  knew  of  a  case  of  a  man  working  for  prob- 
ably not  over  $1.50  a  day  who  owned  three  houses, 
which  he  had  secured  by  buying  a  little  property  at  a 
time  in  this  way.  In  New  York  City  a  very  modest 
lot  would  cost  $5,000,  and  such  an  investment  is  out 
of  reach  of  the  ordinary  wage-earner,  because  even  if 
he  could  get  the  money  for  the  first  payment,  the  in- 
terest charge  on  $5,000  would  be,  say,  $250  a  year,  and 
that  would  amount  to  over  seventy-five  cents  a  day  at 
once.  In  England,  it  is  one  of  the  admitted  defects  of 
the  present  economic  situation  that  the  rural  districts 
afford  little  opportunity  for  investment  and  that  there 
is  no  ''agricultural  ladder  "  upon  which  people  can  climb. 
Both  parties  have  programmes  which  they  claim  will 
remedy  this  situation. 

But  something  further  is  to  be  said:  we  have  con- 
sidered the  number  of  owners  of  accumulated  property. 
But  there  are  also  those  who  have  large  incomes  and 
small  property,  who  naturally  derive  the  benefits  of 
property.    They  may  have  in  a  considerable  degree  the 


322    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

independence  and  the  opportunities  for  development, 
which  property  gives,  but  they  cannot  have  the  op- 
portunity which  comes  from  managing  their  own  prop- 
erty if  they  do  not  acquire  it.  They  are  in  danger  of 
faUing  into  the  ranks  of  those  without  any  property. 

We  have,  in  what  has  been  said,  a  standpoint  for  a 
criticism  of  the  institutions  of  the  country,  with  respect 
to  its  natural  resources,  examining  into  the  effect  which 
natural  resources  and  institutions  have  upon  the  accu- 
mulation of  property.  And  among  these  institutions 
we  must  include  the  organisation  of  industry,  and  in- 
quire what  effect  the  existing  organisation  of  industry 
has  upon  the  accumulation  of  property  by  the  many  or 
by  the  few. 

From  this  point  of  view  we  can  take  up  a  new  coun- 
try and  compare  it  with  an  old  one.  We  find  in  a  new 
country  that  inasmuch  as,  other  things  being  equal,  the 
natural  resources  are  not  so  fully  appropriated  as  in  an 
old  country,  there  are  greater  opportunities  for  accumu- 
lating property  in  considerable  amounts.  These  oppor- 
tunities serve  as  a  stimulus  and  lead  to  great  economic 
activity,  indeed  frequently  to  an  excess  of  economic 
activity.  This  explains  the  wonderful  economic  ac- 
tivity of  the  people  of  the  United  States,  where  oppor- 
tunities are  abundant  and  where  there  is  a  general  hope 
in  the  breast  of  every  man  that  he  may  secure  some  of 
these  opportunities,  and  where  as  a  result  we  witness 
an  intense  struggle  to  secure  them.  In  this  respect 
England  is  relatively  speaking  at  a  disadvantage.  But 
England  is  not  altogether  at  a  disadvantage  so  far  as 
laws  and  institutions  are  concerned.    On  the  contrarj^, 


THE  BENEFITS  OF  PRIVATE  PROPERTY  323 

in  some  particulars  the  laws  are  more  favourable  in 
England  than  in  the  United  States;  for  example,  factory 
legislation,  and  insurance  institutions.  But  the  natural 
resources  have  largely  been  appropriated  in  an  old 
country  like  England  or  Germany,  and  in  these  coun- 
tries there  cannot  be  so  many  opportunities  imtil  man- 
made  opportunities  in  education,  savings  facilities,  etc. 
replace  the  natural  opportunities  of  an  earlier  stage  of 
development. 

The  laws  for  the  utilisation  of  natural  resources  will 
have  an  influence  upon  the  acquisition  of  property  and 
also  upon  the  economic  activity  of  the  members  of  the 
community.  For  example,  American  and  Canadian 
homestead  laws  probably  favour  in  a  very  considerable 
degree  economic  activity  and  the  acquisition  of  prop- 
erty by  large  numbers.  These  laws,  while  far  from  per- 
fect, have  operated  favourably  in  the  United  States  in 
several  ways.  The  land  has  been  practically  given 
away,  or  given  in  return  for  service  in  its  development, 
and  in  comparatively  small  tracts;  this  has  afforded 
chances  to  many  and  not  allowed  anyone  to  monopolise 
the  land.  In  earlier  days  it  was  very  naturally  supposed 
that  there  was  land  enough  for  everybody.  We  have 
the  song  with  the  refrain  ''Uncle  Sam  is  rich  enough  to 
give  us  all  a  farm."  The  writer  remembers  that  song 
sung  in  his  childhood  by  those  belonging  to  his  father's 
generation.  That  was  supposed  to  be  almost  literally 
the  case.^^  The  public  domain  seemed  vast,  and  many 
had  the  hope  that  they  could  acquire  a  farm  and  through 
land  ownership  and  opportunities  for  the  production 
of  wealth  could  at  least  take  their  place  among  the  well- 


324    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to-do.  Laws  and  institutions  which  permitted  or  even 
favoured  the  appropriation  of  large  tracts  of  land  by  in- 
dividuals were  in  that  respect  discouraging  to  the  mass 
of  the  people  of  the  Southern  States  in  the  American 
Union.  Naturally  the  laws  which  regulate  the  utilisa- 
tion of  natural  resources  must  be  adapted  to  particular 
conditions.  The  same  laws  will  not  hold  in  an  agri- 
cultural state  which  are  applicable  to  the  plains  of  the 
West.  And  a  mistake  has  been  made  in  the  application 
of  American  homestead  laws  to  the  plains  in  the  far 
West  which  must  be  owned  in  comparatively  large 
tracts.  We  discover  a  failure,  also,  to  regulate  the  ri- 
parian rights  along  streams,  and  consequently  the 
streams  have  in  some  instances  been  seized  and  the 
land  extending  back  for  an  indefinite  distance  therefrom 
has  been  practically  appropriated,  because  of  a  failure 
to  adapt  the  laws  for  the  utilisation  of  natural  resources 
to  particular  conditions.  ^^  Laws  for  the  appropriation 
of  natural  treasures  in  various  countries  may  be  com- 
pared from  this  point  of  view. 

We  may  likewise  consider  inheritance  laws,  and  ask 
whether  they  tend  to  a  wide  diffusion  of  property  or 
not,  or  to  large  accumulations  which  are  discouraging 
to  the  mass  of  the  people.  Tax  laws  may  also  be  com- 
pared with  respect  to  their  influence  on  the  diffusion 
of  property  among  the  wealthy,  the  well-to-do,  the 
middle  class,  and  the  poor;  and  we  observe  that  in  so 
far  as  they  favour  the  increase  in  numbers  of  the  middle 
and  well-to-do  classes  they  increase  the  total  social 
benefits  which  we  derive  from  property,  and  they 
strengthen  the  grounds  for  the  maintenance  of  private 


THE  BENEFITS  OF  PRIVATE  PROPERTY  325 

property,  if  we  have  given  these  grounds  correctly.  But 
we  must  also  consider  this :  Do  they  discourage  activity 
in  production  and  thus  diminish  the  total  wealth  to  be 
distributed?  Do  tax  laws  possibly  take  the  property  of 
the  middle  and  well-to-do  classes  and  use  it  for  the  bene- 
fit of  the  people  of  low  standards,  where  the  added  in- 
come often  becomes  merely  an  incentive  to  idleness, 
debauchery,  or  increased  propagation  of  undesirable 
citizens,  while,  at  the  other  extreme,  the  very  rich  es- 
cape with  but  light  tax  burdens?  Do  the  laws  seem 
oppressive  and  drive  people  from  the  country,  as  is 
said  to  be  the  case  in  England? 

We  may  take  up  also  the  loan  policy  of  a  country,  and 
ask  how  that  influences  the  diffusion  of  property,  and  in 
particular  whether  it  is  favourable  or  not  to  the  middle 
and  well-to-do  classes.  When  from  this  point  of  view 
we  compare  the  loan  policies  of  the  various  countries, 
we  find  that  our  American  policy  has  been  defective 
because  it  has  on  the  whole  been  favourable  to  the  ac- 
cumulation of  that  form  of  individual  property — public 
debts — by  the  few  rather  than  by  the  many.  Until 
recently  certificates  of  indebtedness  (bonds)  have  been 
sold  to  the  general  public  almost  exclusively  through 
banks  and  investment  companies  and  are  still  mainly 
so  sold;  and  their  contract  is  chiefly  with  those  who 
have  relatively  large  amounts  of  property.  American 
federal  bonds  have  come  to  be  owned  very  largely  by 
national  banks  (and  that  means  their  stockholders) 
and  State  and  municipal  bonds  are  owned  in  large  quan- 
tities (indirectly)  by  insurance  policy  holders  and  sav- 
ings bank  depositors.     How  much  can  be  done  and  is 


326    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

done  elsewhere  to  secure  a  wide  diffusion  of  ownership 
of  pubhc  bonds  is  easily  seen  by  one  who  studies  the 
arrangements  of  a  German  state  like  Bavaria,  where 
the  post-offices  advertise  conspicuously  and  persua- 
sively State  bonds  and  where  it  is  made  easy  for  one  to 
invest  in  them.  The  wide  diffusion  of  the  public  debt 
of  France  is  well  known.  The  placement  and  diffusion 
of  public  debts  can  be  considered  from  other  points  of 
view  and  possibly  different  conclusions  as  to  the  de- 
sirability of  their  wide  diffusion  reached,  but  with  them 
we  are  not  at  present  concerned.  ^^ 

We  could  consider  from  this  point  of  view  also  the 
laws  which  relate  to  education,  to  labour  protection, 
etc. ;  also  such  institutions  as  the  savings  banks.  They 
operate  in  favour  of  the  accumulation  of  property  by 
those  who  will  derive  the  greatest  benefits  from  it.  They 
help  to  secure  the  emancipation  of  large  numbers  by 
giving  them  a  year's  subsistence  and  a  desirable  inde- 
pendence. But  we  find  that  in  this  particular  until  re- 
cently the  United  States  lagged  behind  the  highly  civi- 
lised parts  of  the  world  with  which  we  like  to  compare 
ourselves, — behind  England,  Germany,  France,  Belgium, 
Switzerland,  Italy,  and  some  other  countries.  We  had 
outside  of  New  England  few  private  savings  banks. 
And  in  no  part  of  the  country  were  postal  savings  banks 
found.    Fortunately  we  have  at  last  corrected  this  evil. 

Then  we  consider  the  organisation  of  industry  with 
respect  to  its  influence  upon  the  accumulation  of  prop- 
erty by  the  middle  and  well-to-do  classes,  by  the  wealthy 
and  the  poor,  and  we  find  that,  as  has  already  been  in- 
timated, the  tendency  in  the  organisation  of  industry 


THE  BENEFITS  OF  PRIVATE  PROPERTY  327 

is  towards  the  accumulation  of  property  in  the  hands  of 
the  few.  So  strong  has  been  that  tendency  in  recent 
years  that  in  England  it  has  perhaps  offset  the  move- 
ment in  the  other  direction.  We  have  strong  self- 
conscious  social  action  to  bring  about  wide  diffusion, 
giving  us  in  that  particular  one  of  the  most  remarkable 
periods  in  the  world's  history.  It  operates  through  laws 
of  taxation,  educational  laws,  factory  acts,  and  savings 
banks.  But  it  is  open  to  doubt  whether  this  action  has 
been  able  to  offset  this  tendency  in  the  organisation  of 
industry  of  which  we  have  spoken.  The  control  of 
large  amounts  of  capital  tends  to  the  ownership  of 
large  amounts  of  capital.  Capital  can,  of  course, 
be  divided  into  small  shares,  but  if  the  industry  is  large 
the  great  bulk  of  the  property  in  the  industry  is  likely 
to  be  owned  as  well  as  handled  by  the  few.  An  indi- 
vidual can  buy  a  single  share  in  a  railway  company,  but 
even  if  he  does  buy  a  single  share  in  a  great  railway  cor- 
poration, he  has  no  power  in  the  management  of  the 
railway,  and  does  not  derive  the  benefits  of  the  property 
so  far  as  property  affords  a  sphere  of  activity.  It  hardly 
occurs  to  the  ordinary  man  to  invest  a  hundred  dollars 
in  a  railway  share,  because  it  is  such  a  small  amount 
relatively  that  he  would  feel  helpless  in  the  face  of  the 
great  amounts  with  which  he  would  be  associated.  In- 
dividual property  turns  some  things  over  to  certain 
people  for  management  in  such  a  way  that  they  suffer 
the  loss  if  they  manage  things  poorly  or  receive  the 
benefit  if  things  are  well  managed;  and  these  benefits 
are  not  received  in  full  measure  in  such  a  case  as  that 
under  consideration. 


328    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

In  this  connection  we  also  notice  our  imperfect  laws 
concerning  corporate  industry,  which  allow  the  big 
men  who  have  control  to  acquire  the  property  of  the 
small  men,  and  very  frequently  by  illegal  means.  This 
is  the  familiar  and  well  known  process  of  forcing  or 
''freezing"  out  the  small  stockholders. 

And  even  if  we  have  favourable  laws  regulating  the 
management  of  corporations  and  requiring  the  public- 
ity of  accounts,  etc.,  still  the  influence  of  modern  in- 
dustrial organisation  is  in  itself  not  for  a  wide  diffusion 
of  property,  but  on  the  contrary  favours  its  accumula- 
tion in  the  hands  of  the  few,  although  it  results  in  such 
a  largely  increased  production  as  to  give  to  even  the 
less  favoured  portions  of  the  community,  wage-earners, 
etc.,  more  than  formerly.  And  when,  therefore,  we  find 
laws  which  are  defective  and  a  defective  management 
of  these  laws,  they  accelerate  still  further  the  accumula- 
tion of  property  by  the  few.  But  by  education  and  other 
wise  forms  of  social  effort,  other  forces  may  be,  and  are 
being,  brought  into  play  to  counteract  this  tendency. 

Now  we  have  to  consider,  furthermore,  the  influence, 
favourable  or  unfavourable,  of  property  owners  upon  the 
acquisition  of  property  by  non-property  holders. 

The  grounds  for  the  maintenance  of  private  property 
are  based  upon  the  benefits  which  private  property 
yields  to  the  citizens.  Therefore,  if  those  who  have 
property  exercise  an  influence  which  is  unfavourable  to 
the  acquisition  of  property  by  non-property  holders,  we 
have  to  that  extent  an  offset  to  the  advantages  of  prop- 
erty, and  at  least  conceivably  we  have  something  which 
may  turn  the  advantages  into  disadvantages.    Let  us 


THE  BENEFITS  OF  PRIVATE  PROPERTY  329 

suppose  that  the  benefits  which  society  derives  from 
property  in  the  hands  of  one  class  in  the  community  are 
represented  by  4(^.  Let  us  suppose,  however,  that  these 
property  ow^ners  exercise  an  adverse  influence  upon  the 
accumulation  of  property  by  others,  having  the  spirit 
of  the  monopoHst  in  wanting  to  keep  the  property  and 
to  prevent  others  from  accumulating  property.  Let  us 
suppose  then  that  their  adverse  influence  is  measured 
by  8a.  Then  on  the  whole  the  property  does  more  harm 
than  good.  We  have  to  compare  this  influence  with 
other  possible  influences,  for  under  different  arrange- 
ments other  classes  of  the  community  might  have  prop- 
erty which  would  be  beneficial  to  the  extent  of  12a. 
Suppose  we  have  a  great  and  wicked  monopoly,  as  great 
and  wicked  as  any  reputable  person  ever  supposed  any 
monopoly  to  be.  Suppose  it  attempts  to  keep  certain 
fields  to  itself  and  consequently  to  restrict  the  number 
of  property  owners  in  the  community.  Those  who  are 
in  the  monopoly  might  themselves  derive  benefits  from 
property  which  would  be  measured  by  4ci.  They  might 
confer  certain  benefits  upon  society,  and  the  total  ad- 
vantages might  amount  to  8a.  But  we  have  to  con- 
sider the  community  as  a  whole,  and  conceivably  we 
may  have  here  adverse  influences  equal  to  12a. 

The  grounds  for  the  maintenance  of  private  property 
assume  that  private  property  is  beneficial;  we  would 
therefore  have  to  ask.  What  about  those  classes  of  the 
community  who  do  not  enjoy  the  advantages  of  prop- 
erty? Here  we  have  an  offset  to  the  advantages.  The 
movement  is  not  simply  in  one  direction.  We  might  in- 
fer, indeed,  from  many  works  on  property  that  we  had 


330    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

a  movement  in  one  direction  only.  But  that  is  not  the 
case.  We  have  to  consider  these  various  cross-currents 
in  order  to  reach  a  judgment  which  has  any  value.  We 
have  to  examine  the  different  kinds  of  property  and  the 
different  kinds  and  classes  of  property  owners.  What 
influence  then  does  this  or  that  sort  of  property  have 
upon  the  accumulation  of  property  by  others?  It  may 
be  that  monopolists  can  be  found  who  not  only  prevent 
others  from  accumulating  further  property,  but  who 
may  take  from  them  the  advantages  of  property  which 
they  have.  That  is  then  something  we  have  to  consider 
very  carefully,  namely,  the  influence,  favourable  or  un- 
favourable, of  property  owners  upon  the  acquisition  of 
property  by  non-propert}''  holders.  Railways  may,  for 
example,  be  managed  in  such  a  way  as  to  give  property 
to  some  and  prevent  others  from  accumulating  it.  Then 
we  have  on  one  hand  the  benefits  to  some  part  of  the 
community  which  are  on  the  other  hand  neutralised, 
wholly  or  partially,  by  the  effect  on  the  other  part  in 
that  it  prevents  a  wide  diffusion  of  property. 

Another  illustration.  We  may  take  the  case  of  urban 
land  held  for  purely  speculative  purposes,  and  held  when 
it  is  really  needed  for  productive  purposes.  We  find 
cases  where  men  for  the  sake  of  speculation  ''sit  down" 
on  property  which  is  needed  for  productive  purposes, 
putting  people  to  inconvenience  and  discouraging  them 
and  preventing  in  a  certain  measure  the  accumulation 
of  property.  Suppose  a  man  owns  in  New  York  City, 
which  is  on  a  narrow  island,  a  strip  of  property  in  the 
heart  of  the  island,  and  the  population  has  so  grown  up 
around  it  that  it  has  become  desirable  property;  but  he 


THE  BENEFITS  OF  PRIVATE  PROPERTY  331 

holds  it  out  of  use  and  compels  people  to  go  to  the  other 
side  or  into  Jersey  City  when  his  property  would  be  a 
far  more  advantageous  situation  for  their  purpose.  He 
is  using  property  to  discourage  the  accumulation  of 
property.  But  we  must  also  consider  to  what  extent 
the  disadvantage  to  the  community  of  holding  urban 
property  out  of  use  is  offset  by  the  encouragement  af- 
forded for  the  future  construction  of  new  buildings 
without  tearing  down  unsuitable  structures  which 
might  have  been  erected. ^^ 

Something  more  is  to  be  considered  in  this  case.  We 
ask,  What  are  the  benefits  which  private  property  con- 
fers? and  it  can  also  be  asked  whether  there  are  any 
substitutes  for  private  property;  also,  in  the  United  States, 
can  we  maintain  past  stimuli?  can  we  replace  them 
with  new?  The  peasant  proprietors  are  said  to  show  the 
advantages  which  result  from  private  property,  and  this 
seems  to  be  confirmed  by  Belgium  and  parts  of  Prussia 
in  which  we  have  peasant  ownership,  and  where  the 
farms  are  cultivated  by  the  owners.  But  in  England 
we  find  good  cultivation  and  excellent  utilisation  of  the 
land  under  the  leasehold  system,  it  being  an  exception 
to  the  general  rule  when  the  owner  cultivates  the  land. 
So,  as  far  as  some  of  the  benefits  of  property  are  con- 
cerned, we  find  that  under  certain  conditions  the  lease- 
hold answers  in  large  degree  even  if  not  fully  the  same 
purpose,  so  far  as  cultivation  is  concerned,  but  prob- 
ably not  so  far  as  the  accumulation  of  property  is  con- 
cerned. 

If  we  have  these  benefits  with  leases  in  England,  we 
might  under  a  good  system  of  public  administration 


332    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

have  the  same  benefits  from  pubhc  property  leased  by 
the  cultivators.  Probably  in  Prussia,  for  example,  the 
lease  from  the  state  produces  the  same  beneficial  effects 
as  the  leases  from  private  individuals,  and  perhaps 
better  effects,  because  a  lease  from  the  Prussian  state 
is  better  than  the  average  lease  from  private  individuals. 
The  state  often  gives  a  longer  lease,  and  is  careful  not  to 
exact  a  rental  which  is  ruinous  to  the  man  who  pays  it, 
because  that  would  lead  to  poor  cultivation.  In  Ire- 
land and  in  the  United  States  we  do  not  find  that  rented 
farms  are  generally  accompanied  by  the  enjoyment  of 
the  full  benefits  of  private  property.  We  find  that  leases 
in  these  countries  do  not  seem  to  work  well.  Leases 
appear  to  work  satisfactorily  only  in  exceptional  in- 
stances, probably  better  in  England  and  Germany 
than  elsewhere.  In  England  the  tenant  farmer,  al- 
though he  does  not  own  the  farm,  is  usually  a  man  who 
has  a  considerable  amount  of  property  apart  from  the 
land,  and  on  that  account  he  enjoys  relative  independ- 
ence.^^ In  considering  leases  and  the  benefits  which 
leases  of  pubhc  property  would  confer,  we  have  to  take 
into  account  the  duration  of  the  leases  and  whether 
they  carry  with  them  sufficient  reward  for  the  improve- 
ments made  by  the  cultivator  of  the  soil.  Because,  un- 
less the  leases  carry  with  them  reward  for  improve- 
ments, the  improvements  will  not  be  forthcoming. 
That  is  one  of  the  things  which  after  an  examination 
of  the  different  sorts  of  land  tenure  we  find  to  be  es- 
sential.^^ 

Our  treatment  is  not  complete  unless  we  inquire  into 
such  substitutes  for  property  as  are  found  in  the  insur- 


THE  BENEFITS  OF  PRIVATE  PROPERTY  333 

ance  schemes  of  many  modern  nations,  particularly  Ger- 
many. It  is  undeniably  true  that  in  Germany  insurance 
accomplishes  some  of  the  purposes  of  property  and  re- 
moves some  of  the  disadvantages  of  its  absence.  One  of 
the  purposes  of  property  is  security  for  the  future,  and 
the  sick  funds  and  old  age  pensions  provided  by  modern 
insurance  schemes  give  a  considerable  measure  of  se- 
curity as  well  as  a  feeling  of  security.  Indeed,  there 
are  not  lacking  those  who  say  that  one  of  the  bad  fea- 
tures of  German  insurance  schemes,  providing  as  they 
do  for  most  contingencies  in  the  life  of  the  wage-earner, 
is  such  a  feeling  of  security  for  the  future  as  to  dis- 
courage accumulation,  and  thus  make  the  supply  of 
capital  smaller  than  it  might  be  otherwise.  It  is  alleged 
that  the  ordinary  German  is  not  so  thrifty  as  he  for- 
merly was  and  does  not  save  so  much  relatively;  this  is 
attributed,  in  part  at  least,  to  insurance.  "Why  should 
I  save,"  says  the  wage-earner,  ''when  in  my  old  age,  and 
in  case  of  accident  or  illness  I  shall  be  taken  care  of,  and 
my  family  will  receive  a  large  part  of  my  wages  even 
in  case  of  disability."  But  the  truth  of  this  contention 
is  strongly  disputed  by  others.  It  is  also  possible  that 
small  old  age  pensions  may  encourage  saving  by  ren- 
dering the  outlook  for  the  future  less  gloomy  for  the 
very  poor  but  industrious,  by  holding  out  the  prospect 
of  obtaining  a  competence  for  old  age  by  a  small  addi- 
tion due  to  saving. 

This  is  not  the  time  or  place  to  enter  into  all  the  pros 
and  cons  of  all-inclusive  insurance.  Unquestionably 
it  accomplishes  some  of  the  purposes  of  property;  and 
in  reply  to  those  who  say  that  it  results  in  a  lower  meas- 


334     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

ure  of  thrift,  it  may  be  said  that  the  insurance  itself 
results  in  large  accumulations  which  may  be  used  as 
capital.  As  a  matter  of  fact,  in  Germany  they  are 
sometimes  used  as  loans  to  cities  and  building  asso- 
ciations which  aim  at  improving  the  dwellings  of  the 
poorer  people. 

Recapitulating  then,  we  find  that  property  is  not  a 
single  idea.  It  is  not  a  word  which  stands  for  just  one 
thing  and  nothing  else,  but  it  stands  for  a  number  of 
complex  ideas.  Moreover  we  find  that  we  cannot  say 
that  'property  is  a  good  thing  or  a  bad  thing  without  qualifi- 
cations or  limitations.  Suppose  we  say  that  property  is 
a  good  thing.  Then  we  might  say,  "  Let  us  make  the 
ocean  property."  But  if  we  think  about  it,  we  shall  see 
that  that  would  not  be  a  good  thing,  because  it  would  not 
promote  human  interests  to  the  extent  that  it  now  does 
as  a  free  good.  There  would  be  very  nearly  a  unanimous 
agreement  concerning  that  point.  The  nations  of  the 
world  would  take  up  arms  to  fight  against  a  proposition 
that  the  ocean  should  become  property,  either  public  or 
private;  because  if  it  becomes  property,  it  would  be 
under  the  exclusive  management  of  some  person,  public 
or  private,  or  some  combination  of  legal  entities,  and 
that  would  not  be  a  good  thing.  We  want  it  to  remain 
a  free  good,  and  this  status  is  so  important  that  we  are 
willing  to  fight  for  it.  We  need  not  dwell  upon  that, 
however.  We  have  only  to  consider  how  the  nations 
are  aroused  at  the  prospect  of  any  one  of  them  having 
control.  The  nations  of  the  world  look  askance,  more 
or  less,  at  Great  Britain,  because  her  navy  is  so  great. 
It  seems  almost  as  if  she  had  the  ocean  under  her  con^ 


THE  BENEFITS  OF  PRIVATE  PROPERTY  335 

trol;  but  she  never  has  had,  and  the  nations  of  the  world 
do  not  propose  that  she  ever  shall  have.  The  same 
thing  holds  with  respect  to  the  great  lakes  and  other 
great  bodies  of  water  throughout  the  world.  So  we  can- 
not say  that  property  in  itself  is  a  good  thing  or  a  bad  thing, 
without  an  examination  of  the  kinds  of  goods  and  the  kinds 
of  economic  goods.  We  must  make  a  distinction  be- 
tween free  goods  and  economic  goods.  And  when  we 
treat  public  and  private  property,  we  cannot  say  that 
either  form  of  property  is  a  good  or  a  bad  thing  without 
qualifications  or  limitations.  If  we  say  that  public  prop- 
erty is  a  good  thing  without  making  any  qualification,  we 
at  once  land  in  socialism.  If  we  say  that  private  prop- 
erty is  a  good  thing  without  limitation,  then  we  should 
turn  all  the  property  of  the  world  over  to  private  per- 
sons. It  is  safe  to  say  we  could  not  have  any  real  gov- 
ernment without  property.  Property  is  power,  and  it  is 
questionable  to  what  extent  even  a  real  government  of 
the  people  is  possible  without  ownership  of  property  by 
the  government.  We  may  ask  indeed  with  how  little 
public  property  we  can  have  a  real  people's  government 
instead  of  a  government  which  proceeds  from  private 
property. 

With  regard  to  all  this  there  is  a  very  general  agree- 
ment on  the  part  of  political  philosophers.  We  have 
therefore  to  make  a  separation  and  have  to  discuss  the 
whole  subject  from  the  standpoint  of  private  property 
and  of  public  property.  We  have  also  to  discuss  the 
subject  from  the  standpoint  of  the  subjects  of  property 
and  of  the  objects  of  property;  we  have  to  take  up  one 
kind  of  property  after  another,  or  strictly  speaking,  the 


336    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

kinds  of  goods  over  which  the  rights  of  property  are  ex- 
tended. We  have  considered  this  in  regard  to  the  ocean 
and  we  can  consider  it  in  the  case  of  human  beings. 
When  we  abohsh  property  in  human  beings,  we  say 
that  such  abohtion  is  a  very  good  thing  and  that  we 
must  have  neither  pubhc  nor  pri\^ate  property  in  human 
beings.  The  point  to  emphasise  is  that  we  must  proceed 
in  just  this  way  through  all  these  classes,  in  order  to 
reach  a  clear  judgment  concerning  property. 

And  the  reader  must  be  cautioned  not  to  draw  the 
conclusion  that  society  is  to  use  all  its  resources  to  bring 
about  the  distribution  of  wealth  which  in  itself  is  to  be 
regarded  as  the  best.  Evils  flow  from  the  institution  of 
private  property,  but  we  must  exercise  care  not  to  di- 
minish the  benefits  by  our  efforts  to  reform  it.  The 
relation  of  large  accumulations  to  efficiency  in  produc- 
tion must  be  viewed  with  respect  to  estabhshed  customs 
and  social  psychology.  Some  advantages  of  large  in- 
dividual fortunes  have  already  been  mentioned  which 
are  not  to  be  readily  sacrificed.  Change  must  be  grad- 
ual and  evolutionary,  aiming  to  reach  a  goal  which 
always  recedes.  In  other  words,  it  is  for  society  to 
move  in  the  right  direction.  ^^ 


Notes  and  References  to  Chapter  XIII 

1  P.  31 L  Tiventy-fifth  Annual  Report  of  the  Massachusetts  Bureau 
of  Statistics  of  Labor,  p.  66. 

2  P.  311.  Eleventh  Census  of  the  United  States;  Vital  and  Social 
Statistics,  Pt.  Ill,  p.  186. 

'  P.  312.  Estimates  made  by  W.  I.  King  from  the  figures  given 
in  the  Twenty-fifth  Annual  Report  of  the  Massachusetts  Bureau  of 
Statistics  of  Labor,  p.  266. 

*  P.  313.  Estimated  by  W.  I.  King,  from  the  United  States  Cen- 
sus for  1900  and  the  manuscript  study  by  Max  Lorenz  on  "The 
Distribution  of  Wealth  in  Six  Wisconsin  Counties." 

^  P.  314.  Estimated  by  W.  I.  King  from  the  Statistical  Abstract 
of  the  United  Kingdom  for  1911,  p.  42. 

8  P.  314.  Average  size  of  estate  assumed  to  be  £60. 

^  P.  316.  Estimated  by  W.  I.  King  from  the  Statesman's  Year 
Book  and  F.  W.  Taussig,  Principles  of  Economics,  Vol.  II,  p.  243. 

8  P.  318.  Estknated  by  W.  I.  King.  For  the  statistical  distribu- 
tion of  wealth,  consult  further  the  article  by  G.  P.  Watkins  in  the 
Publications  of  the  American  Statistical  Association,  Vol.  XI,  pp. 
31,  41,  and  48;  also  the  article  by  Warren  Persons  in  the  Quarterly 
Journal  of  Economics,  Vol.  XXIII,  pp.  443,  445. 

3  P.  318.  L.  G.  Chiozza  Money,  Riches  and  Poverty,  p.  51.  The 
estimates  there  given  show  ninety  per  cent,  of  the  people  of  the 
United  Kingdom  to  possess  less  than  £100.  This  is  probably  too 
high  if  we  figure  on  the  basis  of  the  family. 

"  P.  319.  Spahr,  The  Present  Distribution  of  Wealth  in  the  United 
States,  pp.  57,  63.  It  is  with  some  hesitation  that  the  book  of  this 
gifted  young  economist  is  quoted.  It  was  written  in  1896,  and  as  it 
was  in  many  ways  a  pioneer  work,  the  author  deserves  the  praise 
due  to  one  who  independently  strikes  out  in  new  paths.  At  the 
same  time  it  shows  weaknesses  which  as  gifted  an  author,  writing 
now,  would  not  exhibit.  Its  figures  can  be  criticised  at  many  points, 
and  it  is  not  free  from  exaggerations.  It  has,  however,  not  been 
fully  replaced  by  any  subsequent  work  and  can  still  be  studied  with 
profit  by  the  discriminating.     If  we  make  hberal  allowances  for 

337 


338     PROPERTY  AND  THE  DISTRIBUTION  OF  WEAJLTH 

error  with  respect  to  the  property  owners  in  New  York  City  we  have 
still  a  striking  contrast. 

"P.  321.  Some  effort  has  been  made  to  overcome  urban  disad- 
vantages by  cooperative  combination,  several  uniting  in  the  owner- 
ship of  the  apartment  house  or  flats  in  which  they  live.  While 
thus  far  not  much  has  been  accomphshed  in  this  direction,  it  will  be 
certainly  possible  in  the  future  to  do  more  than  has  yet  been  done  to 
open  up  to  the  man  of  small  means  the  advantages  of  participation 
in  the  ownersliip  of  property  in  great  cities. 

12  P.  323.  In  a  congressional  debate  in  1789,  Thomas  Scott,  of 
Pennsylvania,  said,  "One  of  the  most  unhappy  things  we  could  do, 
would  be  to  refuse  selling  those  lands  in  less  quantities  than  by  the 
million  of  acres;  it  would  certainly  be  a  cause  of  disgust,  if  not  of 
separation."    Abridgement  of  the  Debates  of  Congress,  Vol.  I,  p.  100. 

1' P.  324.  See  art.  on  "Irrigation"  in  the  Atlantic  Monthly  for 
November,  1900. 

14  P.  326.  See  H.  C.  Adams,  Public  Debts,  Chap.  Ill,  "Social 
Tendencies  of  Pubhc  Debts." 

"  P.  331.  Probably  no  country  has  ever  gone  so  far  as  have  the 
States  in  the  American  Union  in  preventing  the  kind  of  abuse  of 
private  property  in  land  which  is  mentioned  in  the  text.  Gen- 
erally the  States  tax  urban  imimproved  land  upon  its  selling  value, 
theoretically  on  its  fuU  selling  value,  and  often  actually  upon  a 
close  approximation  to  this,  at  times  perhaps  going  beyond  true 
selUng  value.  Land  owners  have  also  very  generally  to  pay  for  the 
streets  and  street  improvements.  See  the  author's  discussion  of 
this  subject  in  the  Proceedings  of  the  Meeting  of  the  Verein  fur 
Sozialpolitik,  in  Nuremberg,  October,  1911. 

"  P.  332.  In  England  the  present  system  of  concentrated  owner- 
ship of  agricultural  land  with  its  cultivation  almost  exclusively 
by  tenant  farmers  has  according  to  the  admission  of  all  parties 
broken  down. 

"  P.  332.  When  the  author  comes  to  Landed  Property,  land  will 
receive  more  careful  treatment. 

1*  P.  336.  On  the  statistics  of  the  distribution  of  wealth,  in  ad- 
dition to  the  works  already  mentioned,  the  reader  may  consult 
Bowley,  Elementary  Manual  of  Statistics,  Part  IV,  Chap.  IX ;  the 
monograph  by  G.  P.  Watkins,  "The  Growth  of  Large  Fortunes," 
pubhshed   by  the   American   Economic   Association,   Vol.   VIII, 


THE  BENEFITS  OF  PRIVATE  PROPERTY  339 

No.  4,  Third  Series,  November  1907;  Warren  Persons's  article  on 
"Variability  in  the  Distribution  of  Wealth  and  Income"  in  the 
Quarterly  Journal  of  Economics,  Vol.  XXIII,  p.  445;  "  The  Dis- 
tribution of  Ownership,"  by  J.  H.  Underwood,  Vol.  XXVIII,  No.  3, 
1907,  in  the  Columbia  University  Studies  in  Political  Science;  and  in 
the  same  series,  "The  Distribution  of  Incomes,"  by  F.  H.  Streight- 
hofif.  Vol.  LII,  No.  2,  1912.  For  England  consult  especially  the 
Report  fro7n  the  Select  Committee  on  the  Income  Tax,  together  with  the 
Proceedings  of  the  Committee,  Minutes  of  Evidence,  and  an  Appen- 
dix, 1906.    (H.  of  C.  No.  365,  1906.) 

On  the  subject  of  this  chapter  in  general,  the  reader  will  find 
valuable  suggestions  in  L'  Utilite  Sociale  de  la  Propriete  Individuelle 
by  Adolphe  Landry. 


CHAPTER  XIV 

THE   PRESENT  AND   FUTURE   DEVELOPMENT   OF   PRIVATE 

PROPERTY 

We  have  considered  the  grounds  for  the  maintenance 
of  private  property  and  have  gained  some  ideas  in  re- 
gard to  its  present  and  future  development.  We  are  not 
dealing  with  prophecy  here,  but  we  aim  at  tracing  out 
existing  forces,  at  discovering  the  direction  in  which  we 
are  moving,  and  any  proposals  made  for  reform  rest  up- 
on our  analysis  and  investigations.^ 

We  have  seen  the  ends  for  which  private  property  is 
estabUshed  and  maintained.  Its  future  development 
must  aim  at  accomplishing  these  ends  more  fully,  and 
a  development  of  private  property  brought  about  by  the 
endeavour  to  make  it  accomplish  these  purposes  more 
fully  must  be  largely  the  result  of  self-conscious  social 
activity.  We  have  reached  a  period  in  the  develop- 
ment of  society  when  self-conscious  social  action  has 
been  to  a  considerable  extent  attained.  Our  age  is  be- 
coming one  of  social  self-determination,  and  we  cannot, 
if  we  would,  go  back  to  a  period  of  social  infancy.  We 
notice  movements  actually  going  on  which  take  five 
directions,  all  of  which  are  destined,  as  those  responsible 
for  these  movements  think,  to  improve  the  institution 
concerned,  namely: 

340 


DEVELOPMENT  OF  PRIVATE  PROPERTY  341 

I.  An  increase  in  the  mass  of  free  goods. 
II.  A  restriction  of  the  extent  of  private  property 
and  corresponding  extension  of  public  property. 

III.  A  development  of  the  social  side  of  private  prop- 
erty. 

IV.  An  extension  of  private  property  along  certain 
lines;  development  of  rights  akin  to  private  property. 

V.  Changes  in  the  modes  of  acquisition  of  private 
property. 

Let  us  take  these  up  in  the  order  mentioned. 
I.  The  increasing  mass  of  free  goods  is  an  important 
movement,  which  has  attracted  little  attention,  prob- 
ably because  it  is  an  exception  to  the  general  rule  that 
as  civihsation  advances  free  goods  give  way  to  property. 
These  free  goods  are  very  generally  intellectual  goods, 
ideas  to  which  we  fall  heir  with  the  expiration  of  spe- 
cific pieces  of  intellectual  property.  As  patents  and 
copyrights  expire,  the  ideas  formerly  covered  by  prop- 
erty become  free  to  all.  The  increasing  mass  of  common 
knowledge,  free  as  the  air,  to  be  used  by  all  in- propor- 
tion to  capacity,  is  one  of  the  most  precious  treasures  of 
the  human  race. 

Other  exceptional  cases  may  be  noted.  The  Sound 
between  Denmark  and  Sweden  used  to  stand  in  a  quasi- 
private  relationship  to  the  former  country,  which  ex- 
acted tribute  from  vessels  passing  through  it.  It  is 
now  entirely  free. 

Education  has  become  largely  free  to  the  individual, 
and  we  have  an  increasing  mass  of  services,  like  music 
in  public  parks,  which  are  offered  freely  to  all,  and  are 
at  least  quasi-free  goods. 


342     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

II.  Restriction  of  the  extent  of  private  property,  and 
generally  speaking,  corresponding  extension  of  public 
property. 

The  restriction  of  private  property,  of  which  mention 
is  here  made,  necessarily  extends  public  property,  for 
we  have  reference  to  those  things  which  must  be  made 
objects  of  property — 'valuable  things  which  must  be 
placed  under  property  control.  The  only  question  is 
whether  this  property  control  shall  be  public  or  private. 
As  we  have  already  seen,  there  have  in  the  past  been 
some  few  cases  when  it  was  desirable  to  restrict  private 
property  without  the  substitution  therefor  of  public 
property.  That  was  the  case  with  slavery.  That  im- 
provement was  brought  about  by  the  abolition  of  the 
very  idea  of  property,  and  not  by  the  substitution  of 
one  kind  of  property  for  another.  The  same  is  true  with 
respect  to  sovereignty.  The  mediaeval  idea  was  that 
it  was  private  property  and  that  the  king  could  sell  or 
mortgage  his  sovereignty.  What  was  needed  in  this  was 
to  abolish  that  idea  of  property,  and  it  has  been  done; 
the  modern  sovereign  does  not  regard  his  throne  as  pri- 
vate property.  The  same  holds  true  also  with  regard 
to  public  office.  The  modern  idea  of  office  is  not  that 
of  property  but  that  of  a  trust,  although  some  of  our 
spoils-politicians  cannot  even  now  understand  that.  In 
England  the  property  idea  of  public  office  was  at  one 
time  developed  to  such  an  extent  that  a  man  could  ac- 
tually sell  an  office  for  cash,  for  instance,  an  office  in  the 
army.  What  is  wanted  in  such  cases,  then,  is  to  abol- 
ish the  idea  of  private  property;  but  these  cases  are  ex- 
ceptional. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  343 

In  regard  to  the  extension  of  public  property,  illus- 
trations readily  occur.  Public  pleasure  and  playgrounds 
are  examples.  In  cases  of  this  sort  the  purposes  of  prop- 
erty are  better  subserved  by  a  collective  use;  in  fact,  in 
cases  of  this  kind  the  only  possible  satisfaction  of  the 
real  needs  of  the  vast  majority  in  cities,  and  even  in 
smaller  places,  must  be  through  public  property.  We 
cannot  have  the  need  for  playgrounds,  etc.,  satisfied 
through  private  property;  and  if  we  do  not  make  pro- 
vision for  public  needs,  then  private  rights  will  be  in- 
vaded. 

Natural  wonders,  historical  scenes,  etc.,  fall  under 
this  head;  for  example,  Niagara  Falls.  Places  of  his- 
torical interest  and  many  beautiful  pieces  of  property 
ought  to  be  public  property  and  not  private.  There 
ought  to  be  modes  for  the  acquisition  of  such  property, 
and  where  necessary  the  right  of  eminent  domain  should 
be  extended  to  make  it  possible  to  acquire  property  of 
that  kind.  A  society  in  Massachusetts  has  as  its  aim 
the  reservation  of  pieces  of  ground  which  will  better 
subserve  their  purposes  if  they  are  public  property 
than  if  they  are  private  property.  It  is  called  "Trus- 
tees of  Public  Reservation."  And  in  England  we  have 
''The  National  Trust"  with  precisely  similar  aims. 
One  of  the  objects  of  this  Massachusetts  society  is  to 
preserve  public  rights  on  the  shores  of  the  ocean.  ^  Such 
a  State  as  Colorado  needs  a  society  of  that  kind  to  call 
attention  to  these  matters;  for  in  Colorado  there  are 
immense  opportunities  for  acquiring  at  a  trifling  sacri- 
fice great  natural  wonders  and  beautiful  parks  for  the 
permanent   benefit   of   the   general   public.     Thomas 


344    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Arnold  speaks  of  it  as  an  evil  that  so  little  property  is 
reserved  for  public  purposes.  He  speaks  of  this  as  the 
result  of  false  and  degrading  theories  of  civil  society 
and  laissez-faire.^  Of  course  he  does  not  mean  to  speak 
in  opposition  to  private  property  in  its  own  sphere,  but 
he  is  speaking  about  the  undue  extension  of  it  in  places 
where  it  does  not  belong.^ 

Forests,  as  already  mentioned,  come  under  this  head. 
We  know  why  it  is  that  there  is  going  forward  at  the 
present  time  a  development  of  public  property  in  this 
direction.  We  have  already  mentioned  the  practica- 
bility of  a  connection  of  various  economic  purposes 
with  purposes  of  recreation  in  the  case  of  forests,  for 
forests  make  beautiful  parks  and  pleasure  grounds.  The 
case  of  Frankfort  on  the  Main,  Germany,  which  has  a 
forest  of  approximately  thirty  thousand  acres,  affords 
illustration,  as  does  Lynn,  Massachusetts,  of  a  city 
which  is  making  a  beginning  in  this  direction.  It  is  espe- 
cially desirable  to  connect  forests  with  water  works  sys- 
tems, so  that  the  stream  furnishing  the  supply  may  be 
lined  with  forests  on  each  side  and  thus  not  be  polluted. 
Opportunities  are  continually  neglected  for  acquiring 
the  banks  of  streams  and  planting  trees  along  them. 
Also  with  proper  methods  an  amount  of  game  may  be 
raised,  in  publicly  owned  forests,  which  will  be  an  ap- 
preciable item  in  the  food  supply  of  a  nation,  at  the 
same  time  affording  a  desirable  variety  in  our  food.^ 

With  respect  to  a  most  important,  and  indeed  an  in- 
creasingly important  class  of  undertakings,  we  have  to 
choose  between  policy  two  and  policy  three  mentioned 
at  the  beginning  of  this  chapter,  namely,  between  a 


DEVELOPMENT  OF  PRIVATE  PROPERTY  345 

restriction  of  the  extent  of  private  property  and  a  de- 
velopment of  the  social  side  of  private  property,  between 
the  ''keep  out"  and  the  ''let  alone"  policy.^ 

The  "keep  out"  policy  means  that  the  state  keeps 
out,  or  abstains  from  ownership  and  industry;  and  the 
"let  alone"  policy  means  that  the  state  does  not  inter- 
fere with  individuals  in  their  economic  operations.  If 
the  state  violates  the  "keep  out"  policy  it  may  make 
an  industry  like  transport  a  public  industry,  and  then, 
so  far  as  this  industry  is  concerned,  there  is  no  inter- 
ference with  this  private  industry,  because  it  is  public 
from  start  to  finish.  If,  however,  the  property  em- 
ployed in  transportation  remains  private  property,  it  is 
necessary  to  violate  the  laissez-faire,  or  "let  alone" 
principle,  because  unregulated  private  industry  is  here 
inadmissible.  It  is  on  this  account  that  these  two  terms 
describe  so  well  the  two  different  policies.  We  have  to 
move  along  one  line  or  the  other,  and  within  limits  we 
have  to  make  a  choice.  The  general  tendency  in  most 
countries  is  to  move  along  the  first  line;  but  now  in  the 
United  States  a  former  apparent  tendency  has  perhaps 
been  lately  reversed  and  the  present  movement  appears 
to  be  along  the  third  of  these  lines,  manifested  in  the  in- 
creasing public  control  exercised  over  so-called  public 
utilities,  railways,  gas  works,  etc.  In  the  case  of  water- 
supply  the  main  movement  in  the  United  States  is  for 
public  ownership  and  there  is  clear  indication  of  a  pur- 
pose on  the  part  of  the  American  people  to  hand  over  to 
public  ownership  that  whole  class  of  undertakings  which 
we  call  natural  monopolies, — those  lines  of  business  in 
which  competition  is  excluded  by  the  nature  of  the 


346     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

case, — that  is,  permanent  successful  competition, — pro- 
vided control  as  opposed  to  public  ownership  does  not 
prove  successful.  It  is  planned  to  treat  these  monopo- 
lies more  at  length  hereafter/ 

There  is  no  universal  tendency  to  develop  along  the 
one  line  or  the  other,  so  far  as  all  monopolies  are  con- 
cerned. In  addition  to  natural  monopolies,  we  also 
have  copyrights  and  patents.  These  are  social  monopo- 
lies in  which  there  is  no  tendency  to  develop  public 
property  at  the  expense  of  private  property.  But  these 
social  monopolies  are  themselves  limited  in  the  general 
interest;  society,  on  account  of  the  great  advantages 
in  the  encouragement  of  invention,  having  decided  to 
endure  the  inconveniences  of  private  monopoly  for  a 
time  which  will  be  short  as  compared  with  the  history  of 
the  nation.  So  far  as  railways  and  telegraphs  are  con- 
cerned, it  is  a  choice  between  two  and  three.  We  have 
to  violate  one  of  two  principles,  either  the  ''keep  out'^ 
principle  or  the  "let  alone"  principle,  inasmuch  as  in 
the  very  nature  of  things  we  must  have  one  or  the  other. 
In  the  case  of  competitive  business  we  rely  upon  compe- 
tition for  the  regulation  of  production  and  distribution, 
but  in  public  utilities  we  must  have  public  regulation 
in  one  of  two  forms  either  in  the  form  of  public  property 
or  in  the  form  of  private  property  regulated,  or,  to  use 
two  technical  expressions,  we  must  have  control  or 
ownership.^ 

We  have,  then,  these  methods  of  regulation,  the 
method  of  ownership  and  the  method  of  control.  There 
are  difficulties  in  any  method.  We  do  not  escape  diffi- 
culties by  passing  over  from  private  property  to  public 


DEVELOPMENT  OF  PRIVATE  PROPERTY  347 

property.  Nor  do  we  avoid  difficulties  by  the  reverse 
process.  The  question  is  which  method  affords  the 
greater  advantages  and  the  lesser  difficulties,  and  along 
which  line  in  the  long  run  we  are  going  to  succeed  best. 

There  are  certain  facts  to  be  noticed  in  our  present 
discussion,  and  one  is  that  in  the  case  of  railways,  tele- 
graphs, etc.,  the  third  line  of  development  has  to  be 
carried  so  far  that  many  of  the  attributes  of  private 
property  disappear.  Eventually  the  social  side  of  pri- 
vate property  in  these  cases  receives  such  a  develop- 
ment that  those  attributes  of  private  property  which 
give  it  its  distinctive  advantages  are  greatly  diminished 
both  extensively  and  intensively.  This  can  be  shown 
by  the  fact  that  they  are  often  spoken  of  as  public 
property,  which,  as  already  seen,  they  are  not.  But 
the  fact  that  we  use  that  term  shows  that  the  social 
side  is  developed  to  an  unusual  extent,  and  when  we 
develop  to  an  extreme  the  social  side  of  private  prop- 
erty, then  the  attributes  of  private  property  begin  to 
disappear,  and,  consequently,  many  of  the  advantages 
of  private  property  disappear  also. 

Notice  also  that  when  we  have  private  enterprises 
controlled,  special  skill  and  knowledge  are  likely  to  be 
on  the  side  of  private  enterprise.  This  is  because 
technical  skill  is  acquired  in  the  management  of  these 
enterprises  and  those  outside  who  are  expected  to  con- 
trol them  are  without  like  opportunities  to  acquire 
this  technical  skill.  Too  frequently  those  who  lack  the 
special  skill  attempt  to  control  those  who  are  giving 
their  entire  lives  to  this  sort  of  business,  and  we  have  an 
unequal  contest  by  the  very  nature  of  the  situation. 


348    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Especially  is  this  the  case  when  we  have  a  few  great 
companies  supplying  a  large  part  of  the  country  with 
local  electric  transport.  The  author  once  had  a  friend 
who  was  attorney  for  one  of  the  greatest  electric  com- 
binations in  the  country  and  who  went  to  all  parts  of  the 
country  to  argue  his  side  of  the  case  before  municipal 
committees.  Think  how  unequal  was  the  knowledge 
and  talent  on  each  side !  In  many  small  cities  there  was 
simply  the  ordinary  municipal  council,  entirely  new  to 
the  business,  while  on  the  other  side  was  a  man  of  very 
unusual  talent  who  gave  his  whole  time  and  energy  to 
this  business  and  was  always  arguing  the  same  case.  We 
could  not  expect,  under  such  circumstances,  that  the 
public  interests  could  be  adequately  guarded  and  pro- 
tected. 

But  on  the  other  hand,  we  now  have  our  Interstate 
Commerce  Commission  with  increased  powers,^  com- 
prising men  of  capacity,  some  great  experts  giving  their 
entire  time  to  the  regulation  of  transport,  and  we 
have  an  increasing  number  of  ably  manned  State  rail- 
way commissions,  and  the  experiment  of  control  is  be- 
ing made  under  more  favourable  auspices.  ^° 

And  there  is  something  further  to  be  considered  in 
our  argument.  In  such  cases  the  government  says 
to  the  owner  and  managers  of  private  property:  "You 
must  manage  this  property  not  as  you  see  fit  but 
as  we  see  fit,  and  yet  you  must  take  the  responsibility 
of  it.  You  must  manage  it  at  your  own  risk  and  not 
in  a  way  that  would  seem  to  you  to  be  fit  and  proper, 
but  in  a  manner  which  seems  to  us  fit  and  proper." 

We  are  endeavouring  to  unite  two  antagonistic  prin- 


DEVELOPMENT  OF  PRIVATE  PROPERTY     349 

ciples,  as  is  observed  when  we  place  together  the  ex- 
pressions private  property  and  public  utihties.  We 
thereby  take  from  private  property  a  large  part  of  those 
peculiar  quahties  which  make  it  a  blessing;  and  perhaps 
this  cannot  be  better  brought  out  than  in  the  following 
utterance  of  an  experienced  railway  manager : 

"The  main  thing  about  any  employment  that  makes  it 
attractive  to  strong  men  is  the  opportunity,  under  condi- 
tions affording  much  freedom  of  action,  to  exercise  their 
best  initiative,  put  forth  their  best  energy,  and  thereby 
achieve  the  best  results  of  which  they  are  capable;  and  many 
railway  officers  feel  that  the  ever-increasing  restrictions  that 
regulation  is  putting  on  railway  management  are  depriving 
them  of  this  opportunity.  The  public  has  small  conception 
how  the  hundreds  of  federal  and  state  laws  regulating  rail- 
ways, passed  in  recent  years,  and  the  innumerable  orders 
that  are  constantly  being  issued  by  the  Interstate  Commerce 
Commission  and  the  forty-two  state  commissions,  tie  the 
hands  of  railway  officers.  Doubtless  much  of  the  regulation 
is  needed;  perhaps  all  of  it  is  well  intended;  but  the  public 
has  unfortunately  tried  to  adopt  a  policy  of  regulation  that 
will  prevent  railway  officers  from  doing  anything  that  they 
ought  not  to  do,  and  has  overlooked  the  fact  that  to  hedge 
men  about  with  restrictions  of  this  sort  may,  at  the  same  time, 
so  narrow  their  freedom  of  action  as  to  make  it  impossible 
for  them  to  do  many  things  that  they  ought  to  do."  ^^ 

It  suggests  itself  that  public  property  in  public  util- 
ities would  give  a  union  of  harmonious  principles,  but 
immense  political  difficulties  arise  when  we  attempt  to 
solve  our  economic  problems  in  this  way.  While  the 
magnitude  of  the  problems  involved  is  appalling  which- 
ever horn  of  the  dilemma  we  choose,  it  may  suggest  it- 
self that  the  nature  of  things  has  a  wonderful  way  of 


350    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

working  itself  out  sooner  or  later,  and  in  this  case  the 
nature  of  things  means  public  property  in  pvMic  utili- 
ties. 

But  another  sort  of  difficulty  attending  the  control  of 
privately  owned  public  utilities  must  be  mentioned.  It 
lies  in  the  nature  of  things  that  those  who  are  controlled 
should  attempt  to  escape  such  a  control.  Those  who 
are  controlled  would  not  be  human  if  they  did  not  think 
the  control  often  unjust  and  oppressive,  even  when  it  is 
not  so,  because  they  look  at  things  from  their  own  point 
of  view  and  do  not  appreciate  the  public  interests.  How 
could  we  expect  such  appreciation?  It  would  be  diffi- 
cult at  best,  but  when  the  men  in  control  are  more  or 
less  selfish  and  unscrupulous,  the  result  is  inevitable, — 
an  attempt  to  escape  from  control.  And  this  explains 
many  of  the  political  phenomena  of  our  own  time.  This 
is  the  reason  that  the  railways  and  the  local  and  munic- 
ipal monopolies  are  in  politics.  It  is  to  escape  control 
or  to  give  direction  to  control;  for  example,  to  see  to  it 
that  men  of  the  right  kind  are  appointed  on  State  rail- 
way commissions  and  the  Interstate  Railway  Commis- 
sion ;  probably  not  often  men  who  can  be  corrupted  but 
those  in  sympathy  with  the  private  point  of  view.  It 
was  openly  stated  by  the  friends  of  one  of  our  presidents, 
when  a  vacancy  occurred  on  the  Supreme  Bench  of  the 
United  States,  that  he  would  take  into  account  the 
wishes  of  the  railway  people  in  the  appointment,  al- 
though it  was  not  stated  that  he  would  be  exclusively 
governed  by  them.  We  had  come  to  a  pass  where  it  was 
expected  that  those  in  power  would  ask  the  railways 
what  kind  of  a  man  they  would  like  to  regulate  them.^^ 


DEVELOPMENT  OF  PRIVATE  PROPERTY  351 

The  history  of  the  Interstate  Commerce  Commission  is 
instructive  in  this  connection.  In  the  first  enthusiasm 
and  fervour  following  its  establishment  good  men  were 
selected  and  consented  to  serve,  for  example,  men  like 
Judge  Cooley,  of  the  University  of  Michigan,  who  was 
the  first  chairman  of  the  commission  at  a  salary  of  some- 
thing like  $8,000  and  who  refused  a  salary  from  a  rail- 
way company  of  $25,000.  But  the  nature  of  things 
seemed  gradually  to  assert  itself  and  in  the  opinion  of 
many  we  witnessed  an  effort  in  one  way  or  another  to 
shape  this  control  in  such  a  manner  that  it  would  not  be 
disadvantageous  to  the  parties  controlled. 

A  dangerous  state  of  affairs  has  been  seen  in  Chicago 
and  in  many  other  cities  where  a  street  car  company  can 
very  well  afford  to  pay  $150,000  for  a  single  vote  in  the 
municipal  council,  whenever  great  issues  like  the  ex- 
tension of  franchises  are  involved.  We  see  in  the  nature 
of  things  a  strong  temptation,  growing  out  of  control  of 
private  property  when  carried  to  extremes,  and  that 
there  is  this  perpetual  conflict  and  disturbance  in  pub- 
lic life  and  danger  of  enormous  corruption.  But  the 
new  life  and  vigour  of  our  recent  commissions  and  of  the 
Interstate  Commerce  Commission  and  the  probity 
and  capacity  of  many  commissioners  give  renewed 
hope  to  advocates  of  control  and  throw  some  doubts 
upon  what  has  appeared  to  be  "the  nature  of  things  ". 
This  great  experiment  of  control  is  of  world-wide 
significance,  and  its  outcome  must  be  awaited  with  the 
greatest  interest. 

As  has  been  said,  we  want  a  development  of  the  social 
side  of  private  property  in  general.    That  is  the  third 


352     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

line  along  which  private  property  must  be  developed. 
But  here  the  trouble  is  undue  development.  It  can  very 
well  happen  that  a  certain  principle  works  well  until 
carried  out  beyond  a  given  line.  Aristotle  says  that 
virtue  consists  of  a  mean  between  extremes.  Private 
property  must  naturally  and  spontaneously  promote 
the  public  welfare  in  order  that  it  may  yield  the  best 
results.  This  general  principle  in  regard  to  public  prop- 
erty is  formulated  by  the  author  as  follows: 

The  Principle  of  Guidance  in  Changes  from  Pri- 
vate TO  Public  Property  and  from  Public  to 
Private  Property 
Private  property  yields  the  best  results  when  the  social 
benefits  of  private  property  accrue 

a.  Largely  spontaneously; 

b.  When  occasionally  they  are  easily  secured  by 
slight  applications  of  force; 

c.  Wheri  the  social  benefits  of  private  property  are 
secured  as  the  result  of  single  public  acts  occurring 
at  considerable  intervals. 

d.  Private  property  may  yield  excellent  results,  when 
in  more  or  less  frequent  cases  a  continuous  and 
considerable  application  of  force  may  be  needed 
to  bring  its  management  up  to  a  socially  estab- 
lished ethical  level. 

But  in  proportion  as  the  social  benefits  desired  are  se- 
cured by  increasingly  intensive  and  increasingly  frequent 
applications  of  public  power,  the  advantages  of  private 
property  become  smaller  as  contrasted  with  the  advantages 
of  public  property. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  353 

What  we  have  already  stated  ought  to  make  these 
various  points  clear,  but  we  will  illustrate  them  briefly. 
Take  (a), — ''private  property  yields  the  best  results 
when  the  social  benefits  of  private  property  accrue 
largely  spontaneously."  Agricultural  land  affords  an 
illustration.  In  the  main  there  is  an  identity  between 
the  interest  of  the  farmer,  owning  and  cultivating  his 
land,  and  the  interests  of  the  general  public.  That  is 
the  rule  in  the  United  States.  We  have  the  farmer  own- 
ing and  cultivating  his  land  and  following  that  line  of 
conduct  which  is  in  the  interest  of  the  public,  even  when 
he  does  not  think  of  that  interest.  He  wishes  to  secure 
a  large  crop  with  relatively  small  expenditure.  This 
is  also  in  the  interest  of  the  general  public.  In  the  case 
of  rented  land  and  absentee  landlordism,  we  do  not  have 
such  an  equal  identity  of  interests  between  the  land 
owner  and  the  general  public  as  we  do  where  the  farmers 
own  the  land  and  cultivate  it.  It  is  conceivable,  even 
if  highly  improbable,  that  we  may  have  in  the  case  of 
rented  land  a  development  which  will  remove  the  ad- 
vantages of  the  private  ownership  of  agricultural  land. 
Very  fortunately  we  have  at  the  present  time  no  such 
development  in  sight  in  the  United  States,  but  in  Ire- 
land a  development  was  reached  which  greatly  lessened 
the  advantages  of  private  ownership.  However,  a 
remedy  is  being  found,  even  in  Ireland,  which  is  com- 
patible with  private  property. 

Take  (b), — "private  property  yields  the  best  results 
when  occasionally  the  social  benefits  of  private  property 
are  easily  secured  by  slight  application  of  force."  That 
would  hold  in  Germany  with  respect  to  the  public  use 


354     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

under  suitable  restrictions  of  private  forests  as  pleasure 
grounds,  or,  in  England  with  regard  to  those  walks 
across  private  fields,  to  which  the  public  has  a  right 
called  under  the  law  easement  or  servitude.  The  public 
has  a  right  to  walk  through  the  fields  and  in  the  paths, 
and  to  go  over  the  stiles.  If  there  is  resistance  to  the 
public  right,  it  may  be  necessary  occasionally  to  apply 
force,  but  if  this  is  done  vigorously,  so  as  to  show  that 
the  public  will  maintain  its  rights,  there  is  not  neces- 
sarily any  great  conflict  between  public  and  private 
interests.  ^^ 

Notice  in  the  third  place  (c), — '' private  property 
yields  the  best  results  when  the  social  benefits  of  private 
property  are  secured  as  the  result  of  single  public  acts 
occurring  at  considerable  intervals."  Here  the  writer 
has  in  mind  taxation,  as  representative  of  the  social  side 
of  private  property.  This  is  one  among  several  views 
to  take  of  taxation, — to  consider  it  a  return  to  the  gen- 
eral public  and  to  society  for  their  interests  in  private 
property.  Considering  it  in  this  way,  we  have  inter- 
ference with  private  property,  but  it  is  only  an  occa- 
sional interference,  although  it  may  be  at  the  time  a  very 
vigorous  and  far-reaching  one.  The  case  of  the  inherit- 
ance tax  furnishes  an  illustration.  Here  we  have  a  far- 
reaching  interference,  but  for  other  purposes  it  is  nec- 
essary to  have  a  complete  inventory  of  the  property, 
and  it  is  usually  not  very  difficult  to  enforce  the  pay- 
ment of  inheritance  taxes.  This  payment  occurs  only 
once  in  a  generation  and  does  not  in  a  marked  manner 
interfere  with  the  benefits  of  private  property.  The 
chief  inconvenience  is  the  payment  of  the  tax. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  355 

Sometimes  it  is  claimed  that  great  manufacturing 
enterprises,  like  the  works  of  the  United  States  Steel 
Company  in  and  about  Pittsburg,  Pennsylvania,  are 
peculiarly  public,  or  in  other  words  that  they  have  a 
pubhc  side  which  places  them  in  an  entirely  different 
class  from  the  ordinary  business.  It  is  difficult  to  rec- 
ognise this  if  it  is  stated  without  qualifications.^^  But 
even  if  we  do  admit  the  principle,  it  does  not  necessitate 
that  perpetual  interference  with  private  business,  which 
removes  the  advantages  of  private  property.  The  in- 
terference would  be  simply  occasional  through  a  board 
of  conciliation  and  arbitration.  No  one  goes  farther 
in  such  interference  than  the  people  of  New  Zealand 
actually  go  at  the  present  day  when  they  have  compul- 
sory arbitration.  Here  we  have  occasional  interference 
whenever  there  is  an  actual  struggle  or  a  likelihood  of  a 
struggle  between  the  employer  on  one  side  and  the  em- 
ployed on  the  other.  ^^ 

Next  consider  (d), — ''private  property  may  yield 
excellent  results,  when  a  continuous  and  considerable 
application  of  force  may  be  needed."  This  principle 
would  give  us  protective  labour  legislation.  It  is  added 
purposely  to  provide  for  this,  because  a  continuous  and 
considerable  application  of  force  is  necessary  in  order  to 
secure  obedience  to  the  law  which  protects  women  and 
children  and  in  some  cases  men.  The  purpose  of  the  law 
is  to  bring  business  up  to  the  socially  established  ethical 
level,  where  competition  may  be  carried  on  without 
child  labour  and  without  excessive  length  of  the  work- 
ing day.  In  order  to  establish  this  level,  we  must  have 
recourse  to  force  in  more  or  less  frequent  cases.    Never- 


356     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

theless,  if  we  have  a  good  administrative  system  of  in- 
spection with  a  thorough  enforcement  of  the  law  from 
the  start,  the  various  business  enterprises  and  their 
managers  very  soon  fall  into  line  and  the  friction  grad- 
ually diminishes.  Nevertheless,  we  have  to  maintain 
perpetually  a  board  of  factory  inspectors  for  control 
and  to  apply  more  or  less  force  in  certain  cases,  espe- 
cially in  the  case  of  those  factory  employers  who  are  dis- 
inclined to  obey  the  law.  Now  in  such  cases,  we  may 
have  a  considerable  amount  of  interference  and  yet  not 
remove  the  advantages  of  private  property.  The  inter- 
ference does  not  extend  to  the  entire  business,  but  only 
to  certain  aspects  of  it;  otherwise  the  private  owners 
may  do  substantially  as  they  will.  Nevertheless,  we 
have  to  admit  that  in  proportion  as  the  social  benefits 
desired  are  secured  by  increasingly  intensive  and  in- 
creasingly frequent  applications  of  public  power,  the 
advantages  of  private  property  become  smaller  and  the 
grounds  for  passing  over  to  public  property  become 
,  stronger. 

Now  while  it  is  often  true  that  beyond  a  certain  point 
we  cannot  carry  the  development  of  the  social  side  of 
private  property  and  retain  the  advantages  of  private 
property,  it  is  also  true  that  in  general  we  do  want  a 
further  development  of  the  social  side  of  private  prop- 
erty. And  to  some  extent  this  view  will  naturally  show 
itself  in  legislation;  but  it  will  show  itself  to  a  still 
greater  extent  in  judicial  decisions,  because  these  now 
frequently  fail  to  recognise  the  social  side  of  private 
property.  It  will  perhaps  also  show  itself  in  the  develop- 
ment of  taxation. 


Notes  and  References  to  Chapter  XIV 

^  P.  340.  This  is  the  reason  why  the  author  changed  the  title  of 
this  chapter  from  "Reform  of  the  Institution  of  Private  Property." 
That  title  conveys  the  idea  of  something  too  subjective,  and  it 
is  not  his  aim  to  make  this  chapter  a  discussion  of  any  subjective 
ideas,  but  rather  an  examination  of  objective  forces,  and  so  far  as 
opinions  are  taken  into  account,  they  are  regarded  as  forces.  When 
opinion  reaches  a  certain  point,  it  moves  and  shapes  actions,  and 
to  this  extent  only  are  opinions  considered, 

2  P.  343.  The  case  of  Rhode  Island  has  been  mentioned,  where 
through  the  charter  of  Charles  II  the  rights  of  the  general  public 
were  reserved,  so  that  the  people  of  Newport  cannot  shut  out  the 
general  pubUc  from  the  shores. 

'  P.  344.  Miscellaneous  Writings,  p.  78. 

^  P.  344.  The  author  thought  of  this  several  years  ago,  as  he  was 
walking  through  Bryn  Mawr,  Pennsylvania,  one  day.  When  one 
walked  through  that  beautiful  place  one  was  beset  on  every  side  by 
restrictions  of  private  property.  There  was  no  place  to  sit  down  and 
rest.  One  could  only  keep  moving  on  and  enjoying  from  the  walks 
what  one  saw  of  the  beautiful  grounds.  There  should  be  in  such 
places  some  opportunity  for  public  enjoyment  of  collective  property. 
But  this  was  not  so,  and  one  would  have  this  feeling  in  wandering 
through  many  of  our  American  cities,  especially  of  that  size.  How- 
ever, this  evil  is  being  rapidly  corrected,  as  is  illustrated  by  the 
author's  home  city,  Madison,  Wisconsin,  with  its  many  public 
parks,  its  spacious  university  grounds,  and  its  many  miles  of  pleasure 
drives.  And  this  is  simply  a  part  of  a  wide-spread  movement,  more 
pronounced  in  America  than  elsewhere,  although  we  Americans 
are  still  far  from  having  the  equivalent  of  the  beautiful  German 
forests. 

^  P.  344.  The  literature  of  city  planning  may  well  be  consulted 
in  this  connection.  See  especially  the  annual  reports  of  the  National 
Conference  on  City  Planning,  the  two  monthly  magazines  The 
American  City  and  Der  Sfddtcbau;  also  articles  in  current  periodicals. 
Wisconsin  is  making  notable  progress  in  this  direction.    The  area 

357 


358    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  publicly  o^\Tied  forest  land  is  constantly  being  increased  by  pur- 
chase, the  state  forest  preserves  at  present  approximating  400,000 
acres,  and  having  been  placed  under  the  supervision  of  a  competent 
forester,  Mr.  E.  M.  Griffith.  It  is  intended  to  use  these  forests 
for  pleasure  purposes  also,  and  a  plan  has  been  de\ased  whereby  for  a 
nominal  sum  the  State  leases  land  on  the  shores  of  lakes  in  the  State 
forests  to  those  who  desire  to  use  a  tract  for  summer  camps  and 
homes,  on  apphcation  to  the  State  Forester.  For  a  description 
see  Report  of  the  State  Forester  of  Wisconsin,  1909-10,  p.  99, 
issued  by  the  Wisconsin  State  Board  of  Forestry, 

^  P.  345.  See  Newcomb,  Principles  of  Political  Economy,  Bk.  V, 
Chap.  I. 

^  P.  346.  They  have  already  been  treated  by  the  author  elsewhere, 
especially  in  his  Monopolies  and  Trusts. 

8  P.  346.  The  author  in  his  classification  (see  his  Monopolies  and 
Trusts)  rules  out  the  so-called  capitalistic  monopofies,  those  busi- 
nesses which  are  alleged  to  be  monopolies  by  virtue  of  mere  mass 
of  capital,  holding  that  we  can  always  find  some  ground  for  monop- 
oly in  other  features  or  characteristics  of  the  business.  The  sugar 
trust  affords  illustration.  It  used  to  be  said  that  that  was  a  mo- 
nopoly on  account  of  the  amount  of  capital  emploj'^ed  and  the 
skill  with  which  it  was  managed.  But  we  now  know  that  an  expla- 
nation can  be  found  in  other  causes. 

When  the  author  was  lecturing  to  his  class  on  this  subject  in 
1898  (the  date  of  the  first  draft  of  tliis  book)  and  still  earlier,  the  case 
was  not  so  clear  as  now.  Then  he  could  not,  however,  accept  a 
current  belief  in  the  unique  skill  in  the  management  of  the  sugar 
trust  as  an  explanation  of  its  monopolistic  position.  He  knew  that 
sugar  refiners  in  Baltimore  had  been  driven  out  of  business  by  what 
they  claimed  to  be  unjust  discrimination  between  their  port  and  New 
York.  Then,  furthermore,  he  had  evidence  which  made  him  be- 
lieve that  the  railways  discriminated  against  competitors  in  favour 
of  the  trust.  A  gentleman  of  high  standing  whom  he  knew  per- 
sonally, and  who  was  a  wholesale  grocer,  told  him  that  the  sugar 
trust  sold  sugar  to  wholesale  dealers  either  "laid  down"  in  the  place 
in  which  the  wholesaler  was  located,  or  at  the  factory  of  the  refiner. 
Suppose  you  were  in  Chicago  or  Milwaukee.  As  a  wholesaler,  you 
could  pay  a  certain  price  at  the  refinery  or  a  higher  price  in  Chicago 
or  Milwaukee,  as  the  case  might  be,  with  the  freight  paid;  but  the 


DEVELOPMENT  OF  PRIVATE  PROPERTY  359 

wholesaler  found  it  advantageous  to  buy  sugar  laid  down  in  his  own 
city,  allowing  the  trust  to  pay  the  freight  bill,  which  would  seem  to 
indicate  that  the  sugar  trust  had  rates  which  the  wholesaler  could 
not  procure. 

Nor  must  we  forget  that  the  sugar  trust  secured  an  advantage 
over  its  competitors  by  corruption  of  customs  officials,  whereby 
false  weights  were  used  and  the  imported  sugar  of  the  trust  was 
underweighed  and  consequentl}^  undertaxed — one  of  the  most  dis- 
graceful episodes  in  the  history  of  American  government  corrup- 
tion. The  trust  thus  had  a  marked  and  unjust  advantage  over  all 
competitors,  although  it  seemed  that  competitors  also  were  guilty 
of  corruption. 

The  present  author  is  prepared  to  admit  now  that  in  addition 
to  all  other  remedies  we  need  a  very  great  development  of  the  legal 
concept  of  unfair  competition  with  punislunent  of  unfair  practices 
in  order  to  give  a  desirable  scope  to  competition.  Moreover,  it  is 
admitted  that  mere  size  increases  the  necessity  of  some  public  regula- 
tion. An  old-time  strike  in  a  small  iron  mill  had  little  direct  effect 
on  the  pubUc.  But  a  strike  at  Pittsburg  or  Gary  would  have  a  disas- 
trous effect. 

3  P.  348.  See  Appendix  IV,  list  of  cases  on  power  of  the  Interstate 
Commerce  Commission,  p.  879. 

"  P.  348.  As  one  indication  of  progress  in  this  direction,  it  may 
be  mentioned  that  the  University  of  Wisconsin  has  estabUshed  work- 
ing fellowships  in  connection  with  the  State  insurance,  tax,  and  rail- 
road commissions,  the  appointees  working  half-time  in  the  Univer- 
sity and  half-time  in  the  service  of  the  commissions,  the  design 
being  to  train  men  for  the  service  of  the  State. 

"  P.  349.  B.  L.  Winchell,  Chairman  of  the  Executive  Committee 
of  the  Frisco  System,  "The  Drift  towards  Government  Ownership 
of  Railways."    The  Atlantic  Monthly,  December,  1912,  pp.  746-7. 

12  P.  350.  For  a  time  there  appeared  to  be  deterioration  in  the 
Interstate  Commerce  Commission.      "A  new  broom  sweeps  clean." 

"  P.  354.  In  1865  Mr.  G.  J.  Shaw-Lefevre  (now  Lord  Eversley) 
founded  the  Commons  Preservation  Society,  which  with  enlarged 
scope  continues  its  activities  under  the  name  of  Commons  and 
Footpaths  Preservation  Society.  It  has  accomplished  very  remark- 
able results  in  safeguarding  public  rights.  The  story  is  well  told 
in  Lord  Eversley's  work  Commons,  Forests  and  Footpaths. 


360    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

In  the  summer  of  1913  the  present  author  walked  with  an  Enghsh 
farmer  across  the  latter's  fields, following  the  footpath,  and  as  he  ob- 
served the  encroachments  of  the  pubUc  on  both  sides  of  the  proper 
footpath  and  was  told  that  it  was  quite  impossible  to  restrict  the 
people  to  the  legal  width  of  the  way  and  that  it  could  not  be  accom- 
phshed  without  the  employment  of  an  armed  force — he  saw  that 
now  the  pendulum  has  swimg  so  far  that  frequently  the  chief  dif- 
ficulty is  the  protection  of  private  rights. 

1*  P.  355.  If  such  a  business  really  becomes  a  virtual  monopoly 
and  it  proves  impossible  or  even  impracticable  to  restore  competi- 
tion, it  should  be  declared  a  business  affected  with  a  pubhc  interest. 
On  this  subject,  see  The  Control  of  the  Market  by  Bruce  Wyman, 
especially  Chapters  I  and  VIII.  The  present  author,  however,  be- 
lieves that  it  is  feasible  to  retain  a  large  field  for  the  control  of  com- 
petition; but  into  the  theoretical  questions  involved  in  this  treat- 
ment, we  cannot  enter  now  and  here. 

1^  P.  355.  As  a  matter  of  fact,  thoughtful  observers  are  appre- 
hensive about  the  ultimate  outcome  in  New  Zealand.  See  the  work 
by  Le  Rossignol  and  Stewart,  State  Socialism  in  New  Zealand; 
also  V.  S.  Clark's  Labour  Conditions  in  Australia. 


CHAPTER  XV 

THE  PRESENT  AND  FUTURE  DEVELOPMENT  OF  PRIVATE 

PROPERTY  (Continued):  the  extension  of  pri- 
vate PROPERTY  along  CERTAIN  LINES  AND  THE  DE- 
VELOPMENT OF  RIGHTS  AKIN  TO  PRIVATE  PROPERTY 

The  fourth  line  of  development  is  the  extension  of 
private  property  and  the  development  of  rights  akin 
to  property.  Now  this  would  seem  to  contradict  the 
second  line  of  development.  We  noticed,  first  of  all,  the 
development  of  public  property  at  the  expense  of  private 
property,  but  we  also  noticed  a  new  development  of 
private  property.  But  the  apparent  contradiction  here 
is  after  all  not  a  real  contradiction  because  the  develop- 
ment of  private  property  to  which  reference  is  made  is 
along  new  lines.  There  are  certain  cases  in  which  at 
the  present  time  the  law  does  not  secure  to  the  toiler 
the  full  fruits  of  his  toil,  and  in  order  to  bring  it  about 
that  the  one  who  works  shall  receive  the  reward  for  his 
work,  it  is  found  necessary  to  develop  private  property 
still  further  along  some  new  lines.  One  illustration  of 
this  is  afforded  by  the  oyster  beds  in  Chesapeake  Bay, 
where  a  primitive  communism  has  long  prevailed,  the 
taking  of  oysters  being  free  to  all.^  The  development 
of  private  property  in  oyster  beds  is  necessary,  as  it  is 
only  through  private  property  that  we  can  give  encour- 

361 


362     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

agement  to  production,  because  production  will  not  be 
carried  on  unless  the  producer  receives  a  reward.  We 
have  here  involved  the  principle  of  the  twentieth  man. 
Let  us  suppose  that  nineteen  twentieths  of  the  men  who 
are  engaged  in  catching  oysters  in  Chesapeake  Bay  are 
perfectly  honest  men,  upright,  and  well-meaning.  Now 
if  the  twentieth  man  is  dishonest  and  the  nineteen  men 
cultivate  the  oysters  the  twentieth  man  will  reap  the 
fruits  of  their  toil,  or  will  bring  it  about  that  nobody 
will  receive  any  fruits  from  the  efforts  of  cultivating 
the  oysters.  He  would  invade  the  beds  on  which  the 
oysters  were  cultivated,  and  no  oyster  culture  could 
take  place.  We  must  reward  the  one  who  puts  forth 
effort  and  invests  capital  in  order  to  produce  an  increase 
of  oysters.  While  it  is  not  necessary  to  grant  a  perpet- 
ual lease  of  oyster  beds,  we  must  give  a  lease  long  enough 
to  encourage  culture,  and  we  have  to  make  provision 
that  the  man  who  invests  capital  permanently  or  for  a 
long  time  shall  receive  remuneration  for  his  capital  in 
case  his  lease  is  not  continued.^ 

But  we  need,  furthermore,  a  development  of  private 
property  sufficiently  firm  and  strong  to  protect  individ- 
uals who  come  into  conflict  with  private  corporations. 
For  where  individuals  are  placed  in  opposition  to  private 
corporations  and  their  interests,  private  property  is  not 
sufficiently  developed;  or  if  sufficiently  developed,  is  not 
adequately  protected.  For  in  many  cases  the  trouble 
is  not  found  in  a  narrow  conception  of  property  but  in 
inadequate  machinery  for  the  enforcement  of  rights. 
But  the  practical  outcome  is  the  same  in  both  cases. 
Many  illustrations  of  this  could  be  given.    The  shade 


DEVELOPMENT  OF  PRIVATE  PROPERTY  363 

trees  in  front  of  our  houses  in  some  places  in  the  United 
States  are  not  protected  against  the  various  corpora- 
tions which  string  wires  on  poles  in  front  of  these  trees. 
They  mutilate  our  shade  trees  and  we  are  helpless. 
That  used  to  be  the  case  in  Baltimore  when  the  author 
lived  there.  There  may  have  been  some  theoretical 
defence  for  the  private  individual  whose  property  rights 
were  invaded,  but  there  was  no  practical  redress.  There 
lies  before  the  author  a  quotation,^  giving  a  case  which 
comes  under  this  head.  The  case  is  that  of  a  gentleman 
who  had  a  summer  residence  in  Berks  County,  Penn- 
sylvania, which  was  separated  from  the  public  road  by 
a  growth  of  ornamental  trees.  The  telegraph  company 
ran  its  lines  through  this  grove  before  the  owner  bought 
the  property.  Then  the  company  wanted  to  add  wires, 
and  in  the  absence  of  the  owner  and  against  his  protest, 
and  in  spite  of  the  protest  of  the  person  left  in  charge  of 
his  place,  the  telegraph  and  telephone  company  cut 
down  sixty  or  seventy  trees  close  to  the  ground  and  in- 
jured others,  thirty  of  these  trees  interfering  in  no  way 
with  the  telegraph  wires.  The  men  were  arrested,  tried, 
convicted,  and  sentenced  for  trespass:  and  the  case  was 
finally  decided  in  favour  of  the  owner.  Here  there  was 
some  protection,  but  it  was  quite  inadequate.  If  the 
owner  had  been  a  man  of  less  means  and  force  he  would 
have  fared  still  worse.  ^ 

Individuals  have  in  the  past  also  had  quite  inade- 
quate protection  in  dealing  with  the  powerful  American 
express  companies.  It  has  frequently  come  to  the 
author's  knowledge  that  after  the  charges  have  been 
prepaid  they  have  been  collected  again  on  dehvery  and 


364    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

it  has  been  by  no  means  easy  to  recover  the  excess  pay- 
ment when  it  was  discovered.  And  in  how  many  cases 
has  it  never  been  discovered.^  This  is  especially  likely 
to  be  the  case  with  Christmas  presents  and  other  gifts, 
where  one  does  not  like  to  ask  the  sender  concerning 
prepayment;  also  when  parcels  pass  through  the  hands 
of  two  express  companies,  inadequate  protection  to  the 
individual  is  frequent  in  case  of  damaged  property,  each 
company  claiming  that  the  fault  belongs  to  the  other, 
and  the  individual  suffers  the  loss.  A  recent  investiga- 
tion by  the  Interstate  Conamerce  Commission  shows 
that  there  has  been  systematic  fraud  in  overcharging  by 
express  companies  on  many  thousands  of  packages  per 
week,  the  aggregate  amounting  to  millions  of  dollars 
per  annum.  No  attempt  seems  to  have  been  made  to 
punish  the  companies  for  fraud.  A  report  recently 
issued  by  the  Commission  says  in  regard  to  the  double 
collection  of  lawful  charges: 

"The  express  companies  strenuously  deny  that  such  over- 
charges result  from  the  pursuance  of  any  policy  recognized  lq 
the  slightest  degree  by  the  companies  themselves;  but  this 
investigation  has  made  it  clear  that,  whatever  the  policy 
of  the  companies  may  have  been  in  this  regard,  their  manner 
of  doing  business  made  such  result  inevitable,  and  the  re- 
markable fact  is  that  their  machiaery  has  not  been  so  adapted 
as  to  cure  this  evil,  especially  in  the  face  of  the  express  pro- 
vision of  the  law  which  makes  it  a  penal  offence  for  any 
carrier  to  charge,  demand,  collect,  or  receive  a  greater  or 
less  or  different  compensation  for  any  service  than  that 
which  is  named  in  its  tariffs.  The  complaints  upon  this 
score  come  from  all  sections  of  the  country  and  are  not  con- 
fined to  any  one  carrier."^ 


DEVELOPMENT  OF  PRIVATE  PROPERTY  363 

It  is  not  necessary  for  present  purposes  to  enter  into 
the  question  of  intent.  The  sole  point  under  discussion 
is  the  inadequacy  of  the  protection  afforded  to  the  ordi- 
nary man  in  his  deaUngs  with  companies  of  this  kind. 
Numerous  other  illustrations  of  virtual  invasions  of 
property  rights  by  powerful  corporations  can  easily  be 
cited.  One  of  these  is  through  false  report  of  earnings, 
thus  inducing  individuals  to  make  investments,  getting 
their  money  from  them  under  false  pretences.  Note 
further  the  abuse  of  the  interests  of  minority  holders 
and  '^ outside"  interests.  Once  in,  investors  may  have 
funds  tied  up  in  surplus  or  in  wasteful  purchases,  and 
have  no  dividends  and  no  chance  to  sell  stock  without 
loss.  In  such  cases  an  adequate  redress  for  the  ordinary 
person  is  too  infrequent.  But  in  this  case  and  others 
improvement  is  taking  place,  although  the  sufferer  too 
often  finds  it  irritatingly  slow.'^ 

Another  fine  along  which  there  is  room  for  a  develop- 
ment of  private  property  is  to  be  found  in  the  protection 
of  the  property  rights  of  those  who  have  been  the  weaker 
members  of  the  community;  or  perhaps  we  should  rather 
say,  the  development  of  pecuniary  rights  akin  to  prop- 
erty, which  are  not,  strictly  speaking,  property  rights. 
Property  is  developed  through  legislation  and  judicial 
decision,  and  we  know  that  it  has  no  firm  form  and  no 
secure  existence  without  both.  Legislation  moves  along 
various  lines  at  various  rates  of  speed,  for  legislation 
always  represents  actually  existing  social  forces.  If 
any  section  of  the  community  does  not  stand  for  an 
actually  existing  social  force,  it  is  not  represented,  and 
cannot  be  represented,  by  legislation.    In  other  words, 


366    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  equality  of  all  before  the  law  is  a  pure  fiction,  if  we 
speak  of  it  as  something  which  actually  exists.  As  an 
ideal  towards  which  we  are  striving  with  varying  suc- 
cess, the  equality  of  all  before  the  law  is  a  force  and  a 
reahty.  Can  anyone  doubt  this?  One  has  only  to  go  to 
Washington  or  to  one  of  our  State  capitals  when  the 
legislature  is  in  session  and  watch  what  actually  goes 
forward.  Every  law  which  goes  on  the  statute  books 
is  placed  there  because  somebody  or  some  dominant 
force  is  behind  it.  Sometimes  the  necessary  force  may 
be  secured  through  humanity  or  altruism.  Thus  it  is 
that  laws  which  establish,  develop,  and  regulate  prop- 
erty are  made.  We  have  various  interests  which  seek 
protection  through  the  development  of  property  rights 
or  rights  akin  to  property,  and  this  protection  is  se- 
cured through  legislation.  Take  as  an  illustration, 
literary  property.  Why  is  literary  property  so  late  in 
development,  and  why  is  it  so  imperfectly  developed  as 
compared  with  so  many  other  sorts  of  property?  Why  is 
it  that  until  a  comparatively  recent  period  it  scarcely 
existed,  and  that  only  in  the  present  generation  have  we 
had  any  international  protection  of  literary  property 
in  the  United  States?  ^  It  is  simply  because  writers  of 
books  have  been  a  weak  class  in  the  community.  As 
they  have  begun  strongly  to  represent  an  actually  exist- 
ing social  force,  they  have  secured  legislation,  develop- 
ing property  rights  in  productions  of  the  mind.  If  we 
go  back  to  the  period  when  a  scholar  and  a  beggar  were 
often  the  same  we  find  a  very  inadequate  development 
of  literary  property.^ 

But  the  author  has  in  mind  still  another  matter, — 


DEVELOPMENT  OF  PRIVATE  PROPERTY  367 

the  relations  existing  between  persons  and  property, 
which  show  especially  the  necessity  of  a  development  of 
personal  rights  with  pecuniary  significance.  First  of  all, 
let  us  think  of  the  right  of  a  person  to  the  protection  of 
the  valuable  economic  powers  which  he  has,  those 
powers  of  pecuniary  significance  which  are  wrapped  up 
in  the  natural  person,  intellectual  powers  and  physi- 
cal powers, — the  right  to  the  strength  of  his  arms  against 
needless  mutilation  by  transportation  companies  of  all 
sorts,  manufacturing  companies,  unscrupulous  em- 
ployers; a  right  finding  one  expression  in  an  employer's 
liability  to  correspond  with  the  liability  of  those  who 
damage  valuable  material  property, — that  is  responsi- 
bility for  damages  of  a  pecuniary  significance  to  the 
person. 

But  this  expression  of  the  right  in  question  is  unsatis- 
factory, because,  generally  speaking,  the  injury  is  not 
due  so  much  to  the  fault  of  the  employer  as  it  is  to  the 
social  process  of  production;  and  the  responsibility  be- 
longs to  society  at  large  and  society  must  on  the  one 
hand  bear  the  cost  of  personal  accidents  and  injuries  as 
one  part  of  the  costs  of  production;  and  on  the  other 
hand  through  appropriate  measures  society  must  bring 
about  a  diminution  in  these  accidents  and  injuries.  As 
a  matter  of  fact,  relief  is  coming  chiefly  through  in- 
surance schemes  such  as  have  found  their  highest  de- 
velopment in  Germany.^" 

What  are  some  of  these  personal  rights?  Reference 
has  been  made  to  some,  and  one  or  two  others  may  be 
mentioned.  We  have  already  cited  intellectual  prop- 
erty— property  in  an  idea — which  is  being  slowly  de- 


368    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

veloped  and  has  now  reached  a  relatively  high  degree  of 
security. 

We  find  also  in  process  of  evolution  the  right  to  he  well 
born,  to  be  born  under  favourable  conditions.  This  is  a 
development  which  is  making  slow  progress.  This  is 
what  tenement  house  laws  mean,  what  sanitary  laws 
mean, — the  right  to  a  home  under  sanitary  conditions, 
the  right  to  a  development  of  the  powers  of  body  and 
mind.  Such  a  right  is  secured  in  part  by  our  pubUc 
schools  and  compulsory  education.  It  is  only  through 
public  education  that  the  rights  of  all  in  this  particular 
can  be  secured,  and  it  is  a  strange  thing  that  on  the 
grounds  of  freedom  and  liberty,  anyone  should  have 
ever  opposed  compulsory  education,  thinking  only  of 
the  parents  and  not  of  the  children  and  of  the  children's 
powers  for  which  development  should  be  secured.  Law 
shortening  the  length  of  the  working  day  or  week  may 
also  be  regarded  from  the  point  of  view  of  the  right  of 
children  to  be  well  born.  A  debilitated  parent  is  apt  to 
mean  a  debilitated  child  and  most  factory  girls  marry 
sooner  or  later. 

The  right  to  cleanliness,  and  the  opportunity  for  clean- 
liness are  being  slowly  developed.  Public  baths  are  an 
illustration  of  this.  Mention  has  been  made  of  the 
right  to  the  powers  residing  in  the  physical  person 
which  is  receiving  development  through  protective 
labour  legislation,  tending  to  prevent  accidents,  high 
temperature,  foul  gas,  etc.  We  have  gone  so  far  that 
we  now  have  a  proposal  of  international  factory  legisla- 
tion and  even  a  beginning  of  it  through  international 
treaties.  ^^    We  have  been  so  occupied  in  this  country 


DEVELOPMENT  OF  PRIVATE  PROPERTY  369 

with  other  things  that  we  have  not  given  such  attention 
to  this  as  we  should.  Some  evils  are  said  to  be  unpre- 
ventable  by  those  who  do  not  want  their  removal  on 
account  of  the  expense  involved,  but  when  a  bad  way  is 
prohibited,  some  way  is  found  for  doing  the  work  with- 
out the  danger.  Chimney  sweeps  in  England  afford  an 
illustration  of  this,  it  no  longer  being  found  necessary  to 
send  little  boys  up  the  flues  to  clean  the  chimneys. 

And  what  about  the  right  to  an  assured  income?  It  is 
certainly  as  important  a  right  as  could  be  developed; 
there  is  some  movement  in  this  direction.  How  far  is  it 
desirable  to  go  in  respect  to  this?  Our  thoughts  in 
America  have  been  too  much  concentrated  upon  politi- 
cal rights  and  not  sufficiently  upon  economic  rights  and 
in  this  particular  Germany  is  far  ahead  of  America. 
England  also  is  in  advance  of  the  United  States,  al- 
though on  the  whole  behind  Germany  in  this  particular. 
One  can  decide  for  one's  self  what  relative  value  is  at- 
tached to  these  rights.  We  Americans  protect  in  most 
cases  a  man's  right  to  his  house,  but  it  hardly  occurs  to 
us  to  give  a  man  protection  in  his  right  to  a  position. 
But  in  Germany  we  observe  in  the  army  and  the  civil 
service  a  movement  in  this  direction,  although  even 
there  many  would  say  an  inadequate  one.  A  professor 
in  the  German  universities,  for  example,  cannot  be  de- 
prived of  his  position  without  process  of  law  any  more 
than  of  his  right  to  material  things.  This  is  of  great  im- 
portance when  men  are  attacked  for  freedom  of  opinion.  ^^ 

When  we  consider  the  right  of  an  office-holder  to  an 
assured  income,  we  must  place  judges  first  in  the  order 
of  importance.    It  is  in  the  public  interest  that  they 


370    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

should  not  be  exposed  to  the  temptations  attendant 
upon  insecurity  in  their  tenure  of  office.  This  truth  has 
received  recognition  in  all  civilised  lands  and  generally 
subject  to  good  behaviour,  judges  hold  for  life,  or  until 
they  reach  a  legally  determined  age  when  they  are  re- 
tired on  a  pension.  American  federal  judges  are  ap- 
pointed for  life,  but  otherwise  American  judges  are 
usually  elected  for  definite  terms  of  office.  During 
these  terms  heretofore  they  have  had  ample  security 
of  tenure  but  have  had  no  certainty  of  reelection. 
While  in  the  older  and  more  advanced  portions  of  the 
United  States,  reelection  is  very  general,  it  has  no- 
where been  a  certainty  even  for  upright  and  competent 
judges,  and  frequently  an  undignified  scramble  for  ju- 
dicial office  has  been  seen.  A  justice  of  the  Supreme 
Court  of  one  of  our  States  writes  to  the  author  as  fol- 
lows: "The  tenure  of  office  of  judge  of  our  supreme 
courts  is  very  uncertain  in  the  majority  of  states;  that 
is  to  say,  if  they  are  men  and  are  independent.  The 
recall,  too,  increases  the  uncertainty.  It  is  to  be  re- 
membered that  votes  at  two  cents  apiece  in  order 
to  start  a  recall  can  be  obtained  by  corporations  as 
well  as  by  those  who  may  have  the  popular  interests  at 
heart.  It  costs  in  Wisconsin  over  nine  thousand 
dollars  to  send  but  one  letter  to  every  voter.  It  will 
cost  eighteen  thousand  dollars  if  there  is  woman's 
suffrage.  No  judge  can  afford  very  many  recall  cam- 
paigns." 

When  we  look  at  the  recall  of  the  judges  from  this 
point  of  view,  it  seems  to  be  a  reactionary  rather  than 
a  progressive  measure.    Nor  is  it  clear  how  it  is  going 


DEVELOPMENT  OF  PRIVATE  PROPERTY  371 

to  attract  to  the  Bench  an  abler  and  more  independent 
class  of  men. 

So  far  as  the  workingman  is  concerned,  we  are  be- 
ginning to  have  protection  through  insurance.  This 
does  not  give  a  full  and  complete  right  to  a  livelihood, 
but  represents  one  of  the  most  important  movements 
in  that  direction  in  the  history  of  the  world.  In  Teu- 
tonic countries  the  right  to  a  minimum  income  is  guaran- 
teed through  the  poor  law  but  this  is  not  done  in  the 
Latin  countries.  A  minimum  for  subsistence  is  guaran- 
teed, so  that  no  one  shall  starve  to  death.  And  now 
the  long-discussed  proposal  to  establish  a  minimum 
wage  has  already  resulted  in  action  in  widely  separated 
states  and  nations  and  very  generally  in  the  United 
States  it  has  become  practical  politics.  ^^ 

The  development  of  the  civil  service  in  the  United 
States  can  be  viewed  from  various  standpoints.  It  may 
be  considered  a  part  of  the  general  movement  to  give 
some  guarantee  of  employment  as  a  development  of 
rights  to  one's  personal  powers  in  order  to  gain  thereby 
an  income.  This  development  of  a  right  to  employment 
is  an  ideal  which  is  floating  before  the  people,  and  al- 
though it  has  been  resisted  by  a  great  many,  we  are 
making  progress  in  this  direction.  We  have  not  yet 
reached  our  goal  by  any  means.  This  is  one  of  the  de- 
mands of  the  socialists  and  also  a  demand  of  others,  in- 
deed, who  are  not  socialists;  it  is  in  a  way  anti-social- 
istic, as  an  attempt  to  strengthen  the  existing  order. 

It  seems  to  a  great  many  that  the  man  who  is  willing 
to  work  should  have  the  opportunity  to  work.  This 
right  to  demand  and  to  receive  employment  finds  ex- 


372    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

pression  in  a  French  phrase  which  is  almost  EngHsh  and 
is  used  frequently  by  English  writers, — droit  au  tra- 
vail. A  great  deal  was  said  about  this  at  the  time  of 
the  Revolution  of  1848  in  France  and  a  law  was  passed 
which  contained  a  recognition  of  this  right.  It  was 
really  a  proclamation  of  the  government;  but  the  late 
Professor  Anton  Menger,  in  his  work  called  Recht  auf 
den  vollen  Arbeitsertrag,^'^  says  that  it  became  a  law.  He 
says  that  this  proclamation  contained  for  the  first  time 
a  recognition  of  a  fundamental  economic  right  in  the 
interests  of  the  proletariat.  That  would  make  this 
proclamation  epoch-making.  The  provisional  govern- 
ment in  February,  1848,  issued  a  proclamation  which 
recognised  the  right  to  live  by  work,  the  right  of  citi- 
zens to  receive  work.  The  proclamation  was  dated  the 
25th  of  February,  1848.  It  reads  as  follows:  ''Proc- 
lamation by  which  the  provisional  government  under- 
takes to  furnish  work  to  all  citizens:  Paris,  25th  of  Feb- 
ruary, 1848." 

"The  provisional  government  of  the  French  Republic 
undertakes  to  guarantee  the  existence  of  the  workingman 
by  work.    It  undertakes  to  guarantee  work  to  all  citizens,"  ^^ 

The  socialist  or  labour  party  was  overthrown  in  the 
battle  on  the  20th  of  June,  1848,  and  just  before  that 
battle  in  which  the  socialist  party  was  overthrown, 
one  of  the  members  of  the  National  Assembly  presented 
for  incorporation  in  the  Constitution  a  bill  which  recog- 
nised the  right  to  live  by  work  and  which  would  have 
afforded  this  right  the  same  constitutional  guarantees 
afforded  to  property. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  373 

After  the  socialists  were  overthrown,  the  whole  mat- 
ter was  dropped.  Those  who  were  in  power  did  not 
take  the  proposal  seriously  in  any  way;  but  there  was 
a  professed  endeavour  to  afford  opportunity  for  em- 
ployment to  any  and  every  one.^^ 

A  different  right  is  what  the  French  call  droit  du 
travail.  This  shows  a  change  from  the  time  of  one  Rev- 
olution to  the  period  of  the  other.  The  Revolution 
of  1848  is  often  called  the  workingmen's  revolution, 
and  the  first  phrase  droit  au  travail  gives  the  working- 
men's  idea.  It  is  said  that  the  Revolution  of  1789  was 
the  revolution  of  the  manufacturing  and  trading  classes, 
and  the  second  phrase  {droit  du  travail)  gives  their  idea. 
Droit  du  travail  means  simply  the  right  to  work  when 
one  can  find  work,  to  use  one's  powers  without  legal  ob- 
stacle,— wherever,  whenever  one  can  find  the  opportu- 
nity.^^ Droit  du  travail  means  the  right  to  work  without 
any  let  or  hindrance  thrown  in  one's  way  by  a  trade 
union  or  a  gild  as  has  often  happened  in  past  centuries 
as  well  as  in  our  time.  Now  we  are  making  some  prog- 
ress in  the  direction  of  droit  au  travail.  Work  is  fur- 
nished in  times  of  distress,  to  a  greater  or  less  extent, 
by  the  governments  of  the  world.  Indeed,  it  has  been 
frequently  proposed  that  certain  public  improvements 
should  be  deferred  until  private  employment  becomes 
slack  in  order  to  make  the  demand  for  labour  steadier 
than  it  would  otherwise  be.  The  practical  administra- 
tive difficulties  are  very  great  and  one  serious  objection 
is  that  as  a  rule  the  unemployed  are  of  inferior 
efficiency,  as  a  result  of  which  government  must  suffer, 
especially  as  compared  with  private  work  for  which  the 


374    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

more  ejSicient  are  retained.  Other  difficulties  suggest 
the  complexity  of  the  problem.  Should  a  man  be  given 
a  job  suitable  to  his  strength  and  training,  or  should  he 
be  required  to  dig  ditches  and  heave  coal?  Again,  how 
ought  the  rate  of  pay  to  be  regulated?  Of  course,  if  the 
utility  of  the  product  is  less  than  the  cost  of  the  work, 
society  loses.  Nevertheless,  some  progress  in  this  di- 
rection has  already  been  made.  In  the  year  1893,  for 
example,  various  American  cities,  among  them  Cincin- 
nati and  Chicago  being  noteworthy,  furnished  relief 
through  a  cooperation  of  private  and  public  effort. 
Work  on  the  public  parks  in  Cincinnati  was  provided 
and  the  money  came  in  part  from  the  city  and  in  part 
from  private  individuals.  Apparently  German  cities 
very  generally  make  an  effort  almost  as  a  matter  of 
course  to  let  one  undertaking  follow  another  in  such  a 
way  as  to  avoid  needless  irregularities  in  employment. 
It  is  also  proposed  that  contracts  for  work  should  be 
annual  and  it  has  even  been  suggested  that  compulsion 
should  be  exercised  in  this  direction.  Turgot  in  the 
latter  part  of  the  eighteenth  century  went  so  far  as  to 
find  in  steadiness  of  work  the  solution  of  the  labour 
problem,  but  it  is  not  easy  to  see  that  compulsion  in  the 
labour  contract  can  do  much  to  bring  about  this  de- 
sirable end,  so  long  as  we  retain  private  property  and 
private  industrial  initiative.  It  is  evident  that  we  are 
as  yet  very  far  from  that  point  where  work  is  furnished 
to  everyone  who  needs  it.  We  notice  a  social  effort  to 
furnish  work  and  employment,  but  it  is  only  in  part  a 
governmental  effort;  it  is  largely  a  social  effort  of  the 
private  sort,  for  example,  woodyards  supported  by  the 


DEVELOPMENT  OF  PRIVATE  PROPERTY  375 

charitable,  and  as  has  been  said,  opportunities  for  work 
on  the  pubhc  parks  and  highways  provided  by  private 
subscription.^^ 

The  right  to  reputation  is  also  a  right  of  this  character 
and  a  right  not  well  developed,  although  the  theory  of 
the  law  is  that  this  right  should  be  secured  and  we  have 
some  protection.  It  is  difficult  to  secure  this  right  with- 
out limiting  free  discussion  and  free  speech.  We 
must  allow  a  criticism  of  conduct  which  has  a  public 
bearing,  and  that  criticism  may  include  the  right  to 
damage  the  reputation  of  the  person  criticised;  that  is, 
when  the  damage  is  incidental  and  not  intentional.  But 
we  do  not  protect  this  right  as  well  as  some  other  coun- 
tries do.  In  Germany  one's  feeling  and  one's  sense  of 
honour  are  better  protected,  for  there  an  insult  is  a 
legal  offence.  We  hear  a  great  deal  about  Majestatsbe- 
leidigung  {lese-majeste)  which  means  insulting  the  ma- 
jesty of  the  Emperor,  and  many  Americans  suppose 
this  to  be  something  entirely  exceptional.  The  sover- 
eign or  the  Emperor  is  indeed  placed  in  an  exceptional 
position,  but  it  is  an  offence  to  insult  anybody  in  Ger- 
many; naturally  it  is  a  more  serious  offence  towards  a 
sovereign  than  towards  a  private  individual.  The  sov- 
ereign, however,  is  not  placed  in  so  exceptional  a  posi- 
tion as  we  generally  imagine.  ^^ 

But  let  us  now  ask  and  attempt  to  answer  the  ques- 
tion :  Why  is  it  that  rights  in  things  are  better  protected 
than  personal  rights?  It  is  first  of  all  because  rights 
in  things,  as  land,  manufacturing  establishments,  mer- 
cantile establishments,  etc.,  are  of  special  significance 
to  a  few,  but  those  few  are  the  strong  members  of  a  com- 


376    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

munity;  we  do  not  say  that  they  are  not  of  significance 
to  all,  but  that  they  are  of  special  significance  to  the  few 
who  have  great  masses  of  material  things.  And  these 
few  who  have  great  masses  of  material  things  for  which 
they  seek  protection  through  development  of  property 
rights,  need  less  than  others  protection  of  the  person; 
this  is  one  reason  why  they  are  less  anxious  to  have  a  de- 
velopment of  personal  rights  with  pecuniary  significance. 
Their  persons  are  less  exposed,  because  their  large  ma- 
terial possessions  carry  with  them  protection  to  the 
person.  It  is  especially  the  weaker  members  of  the  com- 
munity who  need  protection  of  the  person.  The  very 
resources  of  those  who  have  large  wealth  afi'ord  a  con- 
siderable degree  of  protection  to  the  person.  The  dan- 
gers to  little  children  from  street  cars  and  from  un- 
guarded railway  level  crossings  which  are  a  menace 
to  fife  serve  as  illustration.  People  of  means  provide 
their  children  with  nurses  to  care  for  them,  but  the  chil- 
dren of  the  poor  play  in  the  streets  of  large  cities  and 
they  are  exposed  to  dangers  from  which  the  children  of 
the  rich  are  almost  entirely  exempt.  But  that  is  not  all. 
The  parts  of  cities  and  the  parts  of  the  country  where 
the  people  of  large  means  reside  are  those  parts  in  which 
there  is  less  exposure  to  dangers  of  the  kind  mentioned. 
The  unguarded  railway  level  crossings  and  railway 
tracks  running  through  the  streets  are  usually  in  the 
poorer  sections  of  the  community,  thus  the  position 
which  the  richer  members  of  the  community  occupy 
exempts  them  from  danger,  or  minimises  the  risk. 
Industrial  accidents  happen  usually  not  to  the  million- 
aire but  to  the  workingman.    The  most  dangerous  oc- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  377 

cupation  in  the  country  and  in  the  world  is  probably 
that  of  the  trainmen  on  the  American  railways.  The 
trainman  on  an  American  railway  who  went  into  the 
Spanish  war  did  not  increase  the  dangers  to  which  he 
was  exposed,  but  decreased  them  during  the  war,  if  we 
merely  take  into  account  dangers  from  the  enemy;  but 
if  we  consider  all  of  the  sickness  to  which  he  was  exposed, 
even  then  the  trainman  who  went  into  the  war  perhaps 
improved  his  chances  of  life.  The  trainmen  are,  compar- 
atively speaking,  the  poorer  class  of  the  conamunity. 
Those  who  have  high  salaries  as  superintendents  of 
the  company,  etc.,  are  less  exposed  to  such  dangers. ^"^ 

Another  reason  why  too  frequently  those  who  have 
large  material  wealth  do  not  especially  care  to  have 
rights  of  the  kind  developed  is  that  rights  of  the  person 
must  be  developed  at  the  expense  of  the  owners  of  things 
as  is  seen  most  drastically  in  employers'  liability,  im- 
posing the  burden  upon  the  owners  of  things  in  order 
to  secure  protection  of  person.  Most  of  the  accidents 
which  happen  are  quite  preventable.  Take,  for  in- 
stance, the  level  crossings  in  Chicago.  It  has  been  pro- 
posed to  remove  the  present  maximum  penalty  of  $5,000 
for  a  single  accident  resulting  in  loss  of  life,  but  the 
railway  companies  which  have  to  pay  for  the  loss  always 
resist  the  removal  of  the  maximum  limit,  for  this  re- 
moval, while  affording  increased  protection  of  person, 
would  do  so  at  the  expense  of  the  owners  of  things  and 
of  those  who  are  not  exposed  to  accidents  so  much  as  the 
poorer  members  of  the  community. 

But  it  must  be  added  that  one  reason  for  delay  in  the 
development  of  these  rights  has  been  an  inclination  to 


378     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

put  upon  the  employer  a  responsibility  which,  as  we 
have  ah'eady  seen,  he  rightly  felt  was  not  wholly  his; 
and  now  that  it  has  been  demonstrated  to  what  extent 
accidents  are  due  to  the  nature  of  production,  and  now 
that  in  consequence  we  are  more  inclined  to  place  the 
burden  on  society  in  methods  already  mentioned,  prog- 
ress is  more  satisfactory,  especially  in  European  coun- 
tries. 

But  in  the  second  place,  as  to  causes  for  the  slow 
development  of  personal  rights  of  the  kind  under  con- 
sideration, we  notice  in  addition  to  the  relative  social 
weakness  of  the  classes  especially  concerned,  their  fre- 
quent indifference,  owing  to  their  lower  psychical  devel- 
opment. Wage-earners  are  often  indifferent  to  danger 
and  care  little  about  improved  sanitary  conditions. 
Frequently  they  must  be  almost  forced  to  employ  safety 
devices  and  to  take  proper  precautions  against  danger. 
They  need  to  be  cultivated  in  foresight,  and  by  educa- 
tion in  forethought  they  must  be  rendered  less  willing  to 
take  gamblers'  chances  in  the  matter  of  accidents.  The 
very  fact  that  certain  men  have  become  capitalists  and 
employers  shows  that  those  men  have  in  higher  degree 
the  gifts  of  foresight  and  of  self-control. 

The  periodical  press  affords  abundant  illustrations 
of  the  better  protection  of  property  in  things  than  in 
personal  rights;  hence  it  is  not  necessary  to  take  space 
here  for  quotations  which  the  author  could  give. 

Now  it  is  a  development  of  personal  rights  akin  to 
property  w^hich  the  masses  especially  need.  Such  a 
development  is  going  forward  more  or  less  slowly 
throughout  the  civilised  world  at  the  present  time,  but 


DEVELOPMENT  OF  PRIVATE  PROPERTY  379 

the  need  of  it  is  almost  unlimited.  What  can  be  more 
sacred  than  a  man's  right  to  his  power  to  labour?  If 
this  is  a  sacred  property  right,  as  Adam  Smith  said, 
then  it  needs  protection  just  as  much  as  do  material 
things.  A  certain  judge  has  said,  "Why  should  you  op- 
pose personal  rights  to  property  rights?  Rights  in 
things  are  inherent  in  human  beings.  They  are  all  per- 
sonal rights."  This  sounds  well,  but  what  has  been 
said  shows  a  real  distinction.  To  be  sure,  rights  in 
things  do  inhere  in  persons,  but  we  have  to  do  with 
various  economic  classes  in  a  community  and  those  to 
whom  the  rights  of  material  wealth  are  peculiarly 
significant  are  not  those  to  whom  the  rights  of  personal 
strength  of  mind  and  body  are  of  peculiar  significance. 


Notes  and  References  to  Chapter  XV 

1  P.  361.  See  W.  K.  Brooks  on  The  Development  and  Protection 
of  the  Oyster  Industry  in  Maryland,  in  Report  of  the  Oyster  Com- 
mission of  the  State  of  Maryland,  1884;  also  the  Oyster  (2d  and 
revised  ed.,  1905),  pp.  140-141, 160-178  e«  passim. 

2  P.  362.  However,  this  condition  has  been  somewhat  remedied  by 
the  law  of  1906  (and  subsequently  amended),  whereby  a  lease  system 
was  instituted  for  certain  portions  of  the  Bay.  The  following  in- 
formation was  kindly  furnished  the  writer  by  Honourable  B.  How- 
ard Haman,  "father"  of  the  Haman  Oyster  Culture  Law  of  Mary- 
land, above  referred  to,  in  a  communication  dated  July  15,  1912: 
In  1884  an  individual  living  in  any  one  of  the  tide-water  counties 
was  permitted  to  stake  off  from  the  "barren  bottoms"  (those  parts 
of  land  beneath  the  Bay  and  its  tributaries  which  are  adapted  to 
oyster  culture,  though  no  oysters  are  to  be  found  there  now)  an 
amount  of  land  for  the  purpose  of  "bedding  oysters  ".  No  person 
could  take  more  than  five  acres  of  land  in  this  way,  and  in  some  of 
the  counties  the  amount  which  could  be  appropriated  was  not 
more  than  two  acres.  The  tenure  of  even  these  small  tracts  was 
vague  and  uncertain.  It  was  practically  a  tenancy  at  sufferance 
and  expired  at  the  death  of  the  holder.  There  were  practically 
no  penalties  for  poaching  upon  the  land  so  held.  Indeed  the  only 
security  of  the  holder  depended  upon  the  grace  and  good  will  of  his 
neighbours,  or  upon  the  deterrent  force  of  his  rifle.  The  law  was 
wholly  insufficient  to  protect  him.  Under  this  system  there  was 
an  average  yield  from  "the  natural  bars"  within  the  Maryland 
waters  of  only  10,000,000  bushels  annually  in  the  years  from  1880 
to  1890,  due  also  partly  to  the  fact  that  the  tenant  was  forbidden 
to  use  any  improved  means  for  gathering  the  oysters,  and  this 
condition  practically  continued  until  1906  when  the  Haman 
Oyster  Culture  Law  was  passed,  one  object  of  which  was  to  per- 
mit individuals  to  lease  certain  amoimts  of  the  "barren  bottoms" 
for  oyster  culture.  However,  this  act,  as  finally  passed,  was 
useful  only  to  the  men  who  gathered  oysters  from  the  \xn- 
cultivated    beds — the    "natural    growthers" — and    of    little    use 

380 


DEVELOPMENT  OF  PRIVATE  PROPERTY  381 

to  the  prospective  oyster  culturists;  but  with  subsequent 
amendments  the  law  will  have  enough  business  done  under 
it,  Mr.  Haman  thinks,  in  the  waters  of  three  of  the  principal 
tide- water  counties  of  Maryland  to  furnish  a  good  object  lesson. 
Under  the  provisions  of  this  act  a  Shell  Fish  Comimission  has 
been  created  and  a  series  of  surveys  of  the  beds  made,  covering  a 
period  of  six  years.  For  further  information  see  the  various  Surveys 
of  Oyster  Bars  for  the  counties  of  Maryland,  issued  by  the  U.  S. 
Coast  and  Geodetic  Survey;  the  Reports  of  the  Shell  Fish  Commis- 
sion of  Maryland;  and  C.  C.  Yates's  address,  "The  Relation  of 
the  Work  of  the  United  States  Coast  and  Geodetic  Survey  to 
State  Oyster  Surveys"  {Reprint  from  Report  of  Proceedings  of  the 
Third  Annual  Convention  of  the  National  Association  of  Shellfish 
Commissioners.)  A  communication  from  Mr.  Haman,  dated 
April  1,  1914,  reports  a  retrogression  in  the  long  struggle  in 
Maryland  to  abandon  the  primitive  communism  described,  for  the 
governor  was  said  to  be  about  to  sign  the  so-called  "  Shepherd  Bill  " 
which  appears  to  restrict  the  area  under  the  waters  of  the  Chesa- 
peake open  to  oyster  culturists  and  to  endanger  investments  of 
capital:  all  of  which  is,  however,  denied  by  the  Governor,  Honour- 
able Phillips  Lee  Goldsborough. 

2  P.  363.  From  the  periodical  Forest  Leaves,  December,  1896. 

*  P.  363.  This  refers  to  the  cases  of  Commonwealth  v.  Clark  et  ah, 
3  Penn.  Sup.  Ct.  141  (1896)  and  Marshall  v.  American  Tel.  &  T. 
Co.,  16  Penn.  Sup.  Ct.  615  (1901).  The  first  was  a  criminal  case 
brought  against  the  agents,  upon  whom  a  penalty  was  imposed 
of  fifty  dollars  each  or  fifty  days  in  jail.  The  second  was  a  civil 
suit  for  damages  and  four  hundred  dollars  were  recovered,  a  ridic- 
ulously small  penalty  for  the  wanton  damage.  Many  States  now 
make  it  a  statutory  offence  to  cut  down  or  mutilate  trees  in  this 
manner,  and  Pennsylvania  has  such  a  statute.  See  Garber  v.  Co- 
lumbia Tel.  Co.,  20  Lane.  L.  R.  378  (1903). 

^  P.  364.  In  one  case  the  author  received  a  prepaid  parcel  when 
the  sender  had  carefully  seen  that  it  was  properly  marked.  The 
original  label  was  removed,  and  the  "Prepaid"  on  the  box  was 
painted  out,  so  that  it  could  with  difficulty  be  seen.  At  length 
the  money  was  recovered,  but  it  was  not  possible  to  induce  a  public 
authority  to  take  up  the  case  and  have  the  box  photographed  as  the 
author  wished. 


382    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

^  P.  364.  See  Report  of  the  Interstate  Commerce  Commission, 
No.  4198,  "In  the  Matter  of  Express  Rates,  Practices,  Accounts, 
and  Revenues,"  (Opmion  No.  1967),  Washington,  1912,  p.  389; 
also  pp.  388  et  seqq. 

'  P.  365.  We  do  not  need  to  consider  the  question  whether  or 
not  in  a  technical  legal  sense  fraud  is  to  be  regarded  as  an  invasion 
of  property  riglits.  Tlie  most  notable  attempt  to  remedy  this  evil 
is  found  in  some  of  the  States  of  the  American  Union,  Wisconsin 
may  serve  as  an  illustration.  The  "Blue  Sky  "  Law  of  that  State, 
enacted  in  1913,  places  in  the  hands  of  the  Wisconsin  Railroad  Com- 
mission the  power  of  supervising  investment  companies.  Dealers 
in  securities  must  be  licensed  before  they  can  offer  them  to  the 
public  and  they  must  furnish  to  the  said  Commission  such  informa- 
tion as  it  may  require. 

*  P.  366.  For  a  discussion  of  this  question  see  Mr,  George  Haven 
Putnam's  work.  The  Question  of  Copyright  (2d  ed.,  1896). 

^  P.  366.  An  interesting  point  in  this  connection  is  the  organisa- 
tion of  an  authors'  union  recently,  which  has  as  a  chief  purpose 
the  protection  at  law  of  authors'  rights. 

If"  P,  367.  Workingmen's  insurance  in  Germany  is  divided  into 
three  systems:  sick  insurance,  accident,  and  invalid.  The  last 
includes  pensions  for  those  seventy  years  old.  Under  these  schemes 
the  employer  and  employee  contribute  in  different  fixed  propor- 
tions. The  Government  also  grants  a  definite  sum  towards  the 
pensions  in  the  third  class.  The  administration  of  the  funds  is 
managed  in  various  ways,  but  the  principle  that  representatives 
of  employers  and  employees  should  have  a  voice  is  generally  rec- 
ognised. Employers  have  formed  compulsory  mutual  insurance 
societies  to  meet  the  risks  of  accident  insurance,  and  assessments 
vary  with  trade  risk  and  rates  of  wages.  See  the  new  code  of  1911, 
translated  by  H.  J.  Harris;  U.  S.  Bureau  of  Labor  Bulletin  No,  96, 
Vol,  XXIII,  1911,  pp.  501-774.  For  opposite  points  of  view  as  to 
the  success  of  the  German  system,  see  also  Dr.  Ferdinand  Friedens- 
burg's  The  Practical  Results  of  Workingmen's  Insurance  in  Germany, 
tr.  by  L,  H.  Gray;  and  W.  H.  Dawson's  Social  Insurance  in 
Germany,  1883-1911.  One  of  the  most  recent  and  authoritative 
presentations  of  the  German  system  is  the  paper  presented  by  Dr. 
Friedrich  Zahn,  Director  of  the  Royal  Bavarian  Statistical  Bureau, 
at  the  meeting  of  the  International  Congress  of  Demography  and 


DEVELOPMENT  OF  PRIVATE  PROPERTY  383 

Hygiene  in  Washington,  D.  C,  September  25,  1912.  It  is  de- 
cidedly reassuring  and  encouraging. 

In  the  United  States,  twenty-two  States  have  laws  concerning 
workmen's  comiDcnsation.  See  article  on  "Labor  Legislation"  in  the 
American  Year  Book,  1911,  and  the  Digest  of  Workmeii's  Com-pensa- 
tion  and  Insurance  Laios  in  the  United  States,  October  1913,  pub- 
hshed  by  the  Workmen's  Compensation  Publicity  Bureau  and  the 
Bulletin  of  the  U.  S.  Department  of  Labor  Statistics  No.  126, 
"  Workmen's  Compensation  Laws  of  the  U.  S.  and  Foreign  Coun- 
tries," (1914).  Also  Unemployment  Insurance  by  I.  G.  Gibbon 
(London,  1911)  with  a  preface  by  Hobhouse  which  is  "an  impartial 
study  of  the  actual  operation  of  various  schemes  in  foreign  coun- 
tries," utihsing  reports  prepared  for  the  Paris  Conference  on  Unem- 
ployment. 

In  the  United  States  it  is  probable  that  Wisconsin  leads  through 
the  Industrial  Commission  of  that  State.  See  McCarthy's  The 
Wisconsin  Idea,  pp.  1G2-3,  and  also  the  official  publications  of 
the  Commission,  to  be  obtained  by  addressing  the  Commission 
at  Madison,  Wisconsin. 

InEngland  the  National  InsuranceAct,  1911, established  a  scheme 
of  sickness  and  unemployment  insurance  which  has  been  to  some 
extent  modified  by  the  Amending  Act  of  1913.  See  National  In- 
surance by  A.  S.  Comyns  Carr  and  others. 

'1  P.  368.  Ely,  "Economic  Theory  and  Labor  Legislation," 
presidential  address  in  1907  before  the  American  Association  for 
Labor  Legislation  in  the  "Papers  and  Discussions  of  the  Twen- 
tieth Annual  Meeting  of  the  American  Economic  Association," 
Publications  of  the  Association,  Third  Series,  Vol.  IX,  p.  124.  See 
also  Vol.  I,  Publications  of  the  American  Association  for  Labor 
Legislation  and  also  subsequent  volumes.  See  also  Bulletin  of 
the  International  Labour  Office,  Vol.  I,  1906,  pp.  150-2  et  passim; 
also  subsequent  volumes. 

12 P.  369.  In  J\me,  1911,  the  "Jatho  Case"  attracted  an  im- 
mense amount  of  attention  in  Gennany.  A  Protestant  pastor 
in  Cologne  lost  his  position  on  account  of  alleged  heresies.  It  is 
not  at  all  the  intention  of  the  writer  to  enter  into  the  merits  of 
the  case.  A  great  amount  of  agitation  resulted  on  the  part  of  those 
who  looked  upon  the  dismissal  as  a  dangerous  invasion  of  the  rights 
of  free  speech.    But  even  here  the  pastor  has  a  pension, — to  be 


384     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

sure,  an  inadequate  protection  of  freedom  in  the  eyes  of  his  sup- 
porters. 

"  P.  371.  AustraUa  and  New  Zealand  lead  in  this  legislation. 
Victoria  passed  the  first  minimum  wage  law  in  1896  and  was  the 
pioneer  for  the  world.  Great  Britain  which  passed  a  law  in  1909 
has  special  boards  for  the  lace-making,  box-making,  hammered  and 
dolUed  or  tommied  chain-making  and  tailoring  industries,  and  this 
will  probably  be  extended  to  sugar  confectionery  and  food  preserv- 
ing, shirtmaking,  hollow-ware,  hnen  and  cotton  embroidery,  calen- 
dering and  machine  ironing  in  steam  laundries.  In  the  United  States 
nine  States  have  taken  legislative  action  to  secure  the  minimum 
wage,  but  for  women  and  children  only,  foreign  countries  not  thus 
limiting  their  minimum  wage  laws.  Massachusetts  passed  a  mini- 
mum wage  law  in  1912  and  was  the  pioneer  American  State  in  this 
movement;  in  1913  eight  other  American  States  followed  this  ex- 
ample. These  States  are  CaUfornia,  Colorado,  Massachusetts, 
Minnesota,  Nebraska,  Utah,  Washington  and  Wisconsin.  It  is 
not  necessary  now  and  here  to  pass  judgment  on  the  wisdom  of 
this  and  other  measures  mentioned.  Their  significance  is  found 
in  the  movement  which  they  indicate.  Many  mistakes  are  boimd 
to  be  made  in  our  endeavour  to  reach  our  goal. 

14  P.  372.  Translated  into  English  as  The  Right  to  the  Whole  Prod- 
uce of  Labour,  by  M.  E.  Tanner  (London,  1899)  with  an  introduc- 
tion by  H.  S.  Foxwell.    See  p.  20. 

»*P.  372.  Op.  cit.,  pp.  20-21. 

"  P.  373.  See  Ely,  French  and  German  Socialism;  also  Menger, 
op.  cit.,  pp.  20-24. 

"  P.  373.  Our  courts  insist  strenuously  enough  upon  the  droit 
du  travail,  and  this  is  what  to  them  the  right  to  labour  means.  The 
right  to  labour  in  this  sense  is  a  property  right.  Mr.  Justice  Bradley 
of  the  United  States  Supreme  Court  says  that  the  people's  "  occu- 
pation is  their  property",  Slaughter  House  Cases,  16  Wall.  36 
(1872)  at  p.  122;  and  Mr.  Justice  Swayne,  in  the  same  cases,  says: 
"Labor  is  property  and  as  such  merits  protection.  The  right 
to  make  it  available  is  next  in  importance  to  the  rights  of  life  and 
liberty.  It  lies  to  a  large  extent  at  the  foundation  of  most  other 
forms  of  property,  and  of  all  solid  individual  and  national  prosper- 
ity" (p.  127).  See  also  in  re  Parrott,  1  Fed.  481  (1880) ;  Harbison  v. 
KnoxviUe  Iron  Co.,  103  Tenn.  421  (1889). 


DEVELOPMENT  OF  PRIVATE  PROPERTY  385 

This  droit  du  travail  was  a  real  achievement  in  the  eighteenth 
century  and  seemed  a  finality  to  the  individualistic  philosophy  of 
that  time. 

IS  P.  375.  Professor  John  R.  Commons  has  given  an  interesting, 
and  in  some  respects  novel,  treatment  of  some  of  the  phases  of  this 
subject  in  an  article  entitled  "The  Right  to  Work,"  pubUshed  in 
the  Arena  for  February,  1899.  Of  special  significance  is  his  discus- 
sion of  the  development  of  human  rights  and  the  connection  he 
shows  to  exist  between  economic  evolution  and  the  establislmient  of 
rights  of  an  economic  nature;  with  the  growing  wealth  production 
of  society  new  rights  are  developed  one  by  one.  He  also  makes 
the  point  that  tliis  growth  is  a  religious  process,  the  conversion 
of  society  from  one  point  of  view  to  another;  that  the  change  is 
not  brought  about  merely  by  argumentation.  Professor  Commons 
then  examines  the  obstacles  to  the  right  to  work,  found  in  the  causes 
of  unemployment,  and  discusses  the  appropriate  remedies  in  arbitra- 
tion, etc.  He  cites  a  very  remarkable  statute  passed  by  the  Massa- 
chusetts legislature  in  which  indemnity  was  provided  for  working- 
men  who  should  lose  their  employment  on  account  of  a  certain 
public  improvement.  The  statute  of  the  Massachusetts  legislature 
to  which  reference  is  made  is  as  follows : 

"Section  I.  Any  resident  of  the  town  of  West  Boylston,  employed 
by  any  corporation,  partnersliip  or  individual,  at  the  time  when 
the  plant  of  said  corporation,  partnersliip,  or  individual,  is  taken, 
and  work  therein  stopped,  on  account  of  a  reservoir  for  the  metro- 
politan water  supply,  and  who  is  obliged  by  reason  of  such  taking 
to  seek  employment  elsewhere,  shall  have  the  right  for  one  year 
from  the  termination  of  such  employment  as  aforesaid,  to  file  a 
claim  for  damages  with  the  Metropolitan  Water  Commission,  and 
if  the  same  is  not  settled  within  sixty  days  within  the  filing  thereof, 
he  may  bring  a  bill  in  equity  in  the  superior  court  for  the  county 
of  Worcester  for  the  adjudication  and  collection  of  such  damage. 
Any  number  of  persons  deprived  of  employment,  as  aforesaid,  may 
unite  in  such  bill  and  the  withdrawal  of  any  shall  not  prejudice 
the  rights  of  others. 

"Section  H.  It  shall  be  the  duty  of  the  court  to  ascertain  whether 
or  not  such  claimants  have  resided,  and  been  employed,  and  de- 
prived of  employment,  as  specified  in  this  Act,  and  if  so,  to  issue  a 
decree  in  favor  of  each  to  recover  the  actual  damage  which  he  ha3 


386    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

suffered  by  reason  of  such  loss  of  employment,  not,  however,  to 
exceed  the  sum  of  his  wages  for  six  months  at  the  rate  of  wages  paid 
to  him  for  the  last  six  months  prior  to  such  suspension  of  employ- 
ment." 

Sections  III  and  IV  protect  the  State  against  impositions. 
(Legislature  of  Massachusetts,  Ch,  540,  1896). 

When  the  Prussian  private  railways  were  purchased  by  the  state, 
an  indemnity  of  something  like  a  million  marks  was  provided  for 
the  railway  presidents  who  lost  their  positions,  as  the  present  author 
pointed  out  in  his  report  to  the  United  States  Department  of  State, 
published  in  the  Volume  on  Foreign  Relations,  Department  of  State, 
1880.  And  similar  cases  could  be  cited.  But  it  is  rare  indeed  to 
find  such  special  provision  made  for  wage-earners.  It  is  also  some- 
times so  difficult  to  recognise  a  vested  interest  of  this  sort  on  the 
part  of  wage-earners  that  Mr.  and  Mrs.  Sidney  Webb,  in  their  re- 
markable book  on  Industrial  Democracy,  give  up  the  claim  of  a  vested 
interest  which  workingmen  have  so  strenuously  made,  and  advo- 
cate rather  improved  social  conditions  of  a  general  nature. 

Much  may  be  done  to  provide  continuity  of  work  by  employers, 
both  pubUc  and  private,  simply  by  forethought  and  careful  planning 
so  as  to  make  one  job  follow  another.  Germany  seems  to  excel 
other  countries  in  this  particular.  Our  American  governments  are 
particularly  negligent  in  this  respect,  frequently  dismissing  men  in  a 
ruthless  way.  An  explanation  and  partial  palliation  is  given  in  the 
circumstances  of  our  new  country,  where  it  has  been  easy  to  find 
work. 

1®  P.  375.  In  Germany  a  person  has  been  punished  for  calling 
another  a  schoolmaster  in  such  a  connection  as  to  imply  a  certain 
injurious  contempt,  but  some  think  that  the  right  involved  in  repu- 
tation is  perhaps  best  protected  in  England.  There  is  greater 
freedom  of  the  press  and  of  speech  in  England  than  in  Germany. 
But  the  libel  laws  are  strictly  enforced  by  the  courts.  The  obliga- 
tion rests  more  upon  the  individual  in  England,  and  less  upon  the 
government,  than  in  Germany. 

A  good  example  of  English  carefulness  is  found  in  the  experience 
of  Hilaire  Belloc,  the  brilliant  essayist,  who  was  for  five  years  or  so  an 
M.  P.,  and  who  wrote  a  book  in  collaboration  with  Cecil  Chesterton 
on  The  Party  System.  In  it  he  hinted  at  some  election  irregulari- 
ties, and  the  offended  member  of  Parliament  at  once  notified 


DEVELOPMENT  OF  PRIVATE  PROPERTY  387 

him  of  intended  prosecution.  Belloc  inserted  an  "addendum" 
making  ample  apologies.  In  America,  probably  nothing  would  have 
been  done;  and  even  if  there  had  been  prosecution,  the  courts  would 
not  have  recognised  the  "imputation  ". 

The  way  in  which  our  people  slander  public  officials  is  scandalous, 
and  discourages  many  a  good  man  from  making  public  service  a 
career.  The  American  newspaper  is  not  without  blame  in  this 
particular. 

2"  P.  377.  Cf.  an  editorial  in  the  Army  and  Navy  Journal,  "The 
Hell  of  Railroading,"  for  July  21,  1900.  From  a  detailed  study 
made  by  Dr.  E.  H.  Downey,  now  Statistician  of  the  Wisconsin 
Industrial  Commission,  it  appears  that  the  brakemen  employed  in 
Iowa  during  a  three  year  period  suffered  13  fatalities,  and  90  serious 
injuries,  per  thousand  per  year.  The  Fourth  Iowa  Cavalry — one 
of  the  famous  fighting  regiments  of  the  Civil  War,  a  regiment  which 
participated  in  65  engagements — suffered  a  loss  of  13  killed,  and 
40  wounded,  per  thousand  per  year.  (See  Downey's  History  of  Labor 
Legislation  in  Iowa,  p.  232,  note  311). 


CHAPTER  XVI 

THE    PRESENT   AND   FUTURE   DEVELOPMENT   OF   PRIVATE 

PROPERTY    (Continued) :    modifications    in    the 

MODES  of  acquisition  OF  PRIVATE  PROPERTY  IN 
GENERAL.  EQUALITY  OF  OPPORTUNITY.  SURPLUS 
VALUE. 

We  take  up  now  the  fifth  Hne  of  development  and 
deal  with  modifications  in  the  modes  of  acquisition  of  pri- 
vate property. 

What  are  the  modifications  which  are  actually  taking 
place  in  the  modes  of  acquisition  of  property,  and  what 
are  the  modifications  which  have  been  proposed  and  are 
in  process  of  discussion?  We  can  proceed  in  various 
ways  to  answer  these  questions.  One  way  is  to  take  up 
the  sources  of  income  and  of  accumulated  wealth  and 
to  examine  these  one  by  one,  asking  what  modification 
is  taking  place  or  is  proposed  so  far  as  each  particular 
source  of  wealth  is  concerned.  For  example,  consider 
labour,  the  exercise  of  one's  labour  power  as  a  source  of 
acquired  wealth.  Labour  power  yields  wages.  Is  there 
any  attempt  to  modify  the  acquisition  of  wealth  through 
the  exercise  of  one's  labour  powers?  Undoubtedly  there 
is.  But  this  is  not  the  place  for  the  discussion  of  the 
earnings  of  labour.  It  is  sufficient  for  present  purposes 
to  call  attention  to  the  pronounced  self-conscious  ef- 

388 


DEVELOPMENT  OP^  PRIVATE  PROPERTY  389 

forts  of  civilised  society  to  make  it  easier  to  acquire 
property  through  labour.  This  movement  is  one  of  the 
great  dominant  tendencies  of  our  age,  and  never  in 
earlier  centuries  has  the  world  seen  anything  like  it. 
Even  a  catalogue  of  existing  measures  would  require 
much  space.  We  have  education  in  all  its  phases,  pro- 
tective labour  legislation,  modern  industrial  insurance, 
improved  dwellings,  and  numerous  other  measures 
which  will  occur  to  the  intelligent  reader. 

When  we  come  to  the  matter  of  speculation,  we  find 
that  the  method  we  are  adopting  throws  new  light 
upon  this  entire  problem.  Generally,  as  this  subject 
is  treated,  we  do  not  get  any  one  point  of  view.  The 
notions  we  have  in  regard  to  speculation  and  public 
movements  concerning  speculative  gains  are  more  or 
less  vague,  because  we  wander  from  point  to  point. 
Let  us  view  the  subject  now  from  this  one  point, — 
modes  of  income  and  modifications  of  these  modes. 
What  is  the  conscious  social  tendency  with  respect  to 
speculative  gains?  We  can  see  when  we  review  the 
whole  ground, — although  it  may  surprise  those  who 
have  not  done  so, — that  there  is  a  clearly  marked  ten- 
dency unfavourable  to  speculative  gains  including 
chance  gains  or,  as  they  are  technically  called,  gains  of 
conjuncture.  The  question  is.  What  manifestation 
have  we  of  this  social  desire?  We  cannot  well  under- 
stand the  laws  against  lotteries,  when  we  consider  them 
as  isolated  from  other  laws  and  measures,  but  they  be- 
come clearer  as  part  of  this  general  movement.  We 
must  think  of  speculation  in  the  widest  sense,  in  all  its 
forms,  good  and  bad,  from  the  exercise  of  foresight  on 


390    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

behalf  of  society,  with  individual  profit,  which  is  legit- 
imate, (and  has  a  far  wider  scope  than  is  generally 
understood)  to  gambling  in  its  various  forms.  In  lot- 
teries we  have  an  extreme  case  of  the  gains  in  specula- 
tion, and  in  the  United  States  they  are  forbidden  and 
there  is  a  strong  social  sentiment  against  them,  which 
is,  however,  of  comparatively  recent  growth.  American 
colleges  have  used  lotteries  as  a  source  of  revenue  as 
late  as  the  first  half  of  the  nineteenth  century.  But 
in  Continental  Europe  they  are  frequently  made  gov- 
ernmental monopolies  in  order,  it  is  alleged,  to  control 
the  evil  and  reduce  it  to  a  minimum,  private  lotteries 
being  forbidden.  Lotteries  on  behalf  of  benevolent 
objects,  however,  still  receive  special  authorisation  and 
that  with  apparent  ease,  if  one  may  judge  from  the  con- 
spicuous advertisements  of  them  which  everywhere 
greet  the  traveller  in  a  city  like  Munich. 

To-day  when  one  buys  a  share  in  a  national  bank, 
one  has,  as  a  rule,  the  means  of  knowing  very  nearly 
what  one  is  doing;  if  there  is  misrepresentation  on  the 
part  of  the  managers  of  the  bank  in  order  to  get  the 
money  of  other  people  into  their  pockets,  it  is  punished 
severely.  We  observe  an  increasingly  severe  inspec- 
tion of  banking  business  throughout  the  world  and  it  is, 
in  part,  with  a  view  to  cutting  down  speculative  gains. 
Publicity  of  corporate  accounts  tends  in  this  direction; 
if  such  accounts  had  been  honestly  kept  during  the  last 
two  generations  and  had  been  made  public,  speculative 
gains  and  losses  would  have  been  very  much  diminished. 
Speculation  finds  a  considerable  field  in  secrecy  of  ac- 
counts and  in  false  accounts.    In  the  accounts  of  monop- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  391 

olies,  especially,  the  tendency  of  unregulated  private 
management  is  to  cut  down  the  apparent  gains. 

We  find  a  movement  somewhat  antagonistic  to  prof- 
its in  the  desire  to  restrict  and  regulate  the  amount  re- 
ceived by  capital.  ^  On  the  whole,  however,  people  have 
not  yet  formulated  to  themselves  a  desire  to  lessen  the 
receipt  of  income  through  capital,  and  the  movement 
antagonistic  to  profits  is  not  a  fully  self-conscious  one; 
that  is  to  say,  it  is  a  social  movement  which  is  not  self- 
conscious  as  to  this  end,  but  it  is  directed  against  pure 
profit  in  the  sense  of  a  surplus  over  and  above  interest 
and  wages  of  superintendence.  This  happens  whenever 
public  management  takes  the  place  of  private  manage- 
ment. The  tendency  in  the  United  States  and  in  less 
degree  elsewhere  is  to  lessen  or  eliminate  pure  profits  by 
reducing  charges,  improving  service,  raising  wages  and 
shortening  the  hours  of  labour.  But  in  some  cases  a 
profit  is  still  retained.  What  could  we  call  profits  in  the 
case  of  the  German  state  railways?  We  have  wages,  of 
course.  We  have  salaries  of  a  certain  sort,  not  very 
high,  but  of  moderate  amount.  We  have  interest  on  the 
railway  bonds  which  in  a  case  of  this  kind  become  vir- 
tually, if  not  nominally,  government  bonds.  We  have 
return  for  capital  invested.  A  return  from  the  invest- 
ments of  land  in  this  case  would  be  analogous  to  the  re- 
turns on  capital.  And  yet  a  separation  is  possible,  as  is 
shown  in  Wisconsin  by  the  valuation  of  the  land  occu- 
pied  and  used  by  railways  in  the  State.  Here  we  have  a 
tendency  to  distribute  among  the  public  the  gains  in 
improvements  and  lower  charges  or  else  better  facilities 
for  the  old  charges,  such  as  fine  railway  stations,  etc. 


392     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

The  entrepreneur  in  public  enterprise  is  some  political 
unit;  for  example  a  city;  and  cities  sometimes  operate 
water  works  and  other  utilities  for  profit,  diminishing 
taxes  thereby.  But  on  the  whole,  the  tendency  of  pub- 
lic enterprise  is  not  to  seek  profits  in  the  sense  here 
used  of  a  surplus  above  wages,  interest,  etc.  It  seems 
a  characteristic  of  private  enterprise  rather  than  of  pub- 
lic. Whatever  movement  may  exist  in  the  direction  of 
substitution  of  public  for  private  business,  is  a  tendency 
at  the  same  time  against  profits. 

We  find  also  a  tendency  to  reduce  the  gains  of  monop- 
olies to  what  are  regarded  by  legislatures  and  courts  as 
fair  returns  to  capital  and  enterprise.  And  fair  is  in- 
terpreted as  in  the  main  determined  by  the  returns, 
under  normal  competitive  conditions,  of  undertakings 
which  may  be  compared  to  the  monopolies  with  respect 
to  magnitude,  risks  incurred,  difficulties  to  be  overcome, 
demands  on  managerial  capacity,  etc.  Also  it  is  strongly 
insisted  by  the  Wisconsin  Railroad  Commission  that  the 
returns  must  be  adequate  to  produce  the  desired  service; 
in  other  words,  society  must  pay  the  necessary  supply 
price.  The  specialist  will  do  well  to  consult  the  illumi- 
nating discussions  of  interests  and  profits  in  the  Re- 
ports of  the  Wisconsin  Railroad  Coromission.  Here  we 
have  space  for  only  the  following  quotation,  which  well 
states  a  prevailing  tendency  in  modern  economic  society : 

"The  amount  which  constitutes  a  reasonable  return  upon 
the  investment  may  also  vary  with  both  local  and  general 
conditions.  In  a  general  way  the  reasonable  return  may 
be  said  to  be  that  rate  of  return  at  which  capital  and  business 
ability  can  be  had  for  development.     Theoretically  it  can 


DEVELOPMENT  OF  PRIVATE  PROPERTY  393 

not  be  lower  than  this,  for  in  that  case  no  capital  would 
enter  the  field.  Under  free  competition  it  could  not,  in  the 
long  run,  be  higher  than  this  figure,  for  if  it  was,  the  supply 
of  capital  for  these  purposes  would  be  increased,  and  this 
increase,  in  turn,  would  tend  to  reduce  the  rate  of  profits 
and  interest.  But  free  competition  is  out  of  the  question 
in  the  case  of  such  utilities,  for  they  are  monopolistic  in  their 
nature.  It  is  for  this  reason  that  in  the  case  of  such  monopo- 
lies the  term  'reasonable'  has  been  substituted  for  the  con- 
ditions otherwise  brought  about  through  competition.  Since 
competition  did  not  exist,  it  could  not  regulate,  hence  some 
other  regulating  force  had  to  be  resorted  to.  This  force  is  im- 
plied in  regulation  through  absolute  legislation,  and  this  regu- 
lation is  guided  by  what  is  reasonable  under  the  circum- 
stances. To  determine  what  is  reasonable  in  any  given  case 
is  a  matter  of  investigation  and  judgment.  .  .  .  The  rea- 
sonable rate  of  interest  and  profit  can,  perhaps,  be  said  to 
be  a  rate  that  closely  approximates  the  returns  that  are  re- 
ceived upon  capital  invested  in  other  undertakings  where 
the  risks  involved  and  other  conditions  are  similar."  ^ 

If  we  know  exactly  where  a  railway  stands  and  exactly 
what  its  prospects  are  for  the  coming  year,  we  have  lit- 
tle opportunity  for  what  might  be  called  speculative 
gain.  The  telegraph  does  something  to  lessen  specu- 
lative gains,  through  improved  means  of  transporta- 
tion and  communication,  and  higher  education  makes 
it  less  easy  to  prey  upon  the  public.  We  have,  indeed, 
under  the  head  of  the  movements  which  seek  to  cut 
off  speculative  gains,  a  direct  abolition  of  speculative 
gains,  even  on  behalf  of  worthy  objects.  This  explains 
the  movement  against  lotteries  and  everything  of  that 
sort,  including  contrivances  to  get  money  for  churches 
which  partake  of  a  lottery  character. 


394     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Finally,  we  have  efforts  to  cut  down  the  private  re- 
ceipts of 'the  rent  of  land.  Apart  from  the  agitation  of 
opponents  of  landed  property,  we  have  a  pronounced 
movement  in  favour  of  the  public  ownership  of  natural 
treasures  and  water  power.  We  have  in  our  modern 
system  of  taxation  a  manifestation  of  this  tendency. 
Some  European  countries  have  the  increment  taxes, 
which  in  the  case  of  sales  take  a  part  of  the  increased 
value  of  land;  but  no  country  in  the  world  imposes  so 
heavy  burdens  on  the  land  owner  as  the  United  States, 
where  the  people  in  their  collective  capacity  take  so 
much  of  the  annual  value  of  the  land  in  taxes  based  on 
its  selUng  value  and  in  special  assessments,  as  to  make 
themselves  virtual  owners  of  a  part  of  the  land  which  is 
large  in  proportion  to  the  entire  value.  Urban  land  is 
especially  affected  by  this  movement.  We  notice  also 
throughout  the  world  an  effort  for  improved  dwellings, 
which  on  the  whole  is  a  manifestation  of  the  tendency 
to  cut  down  speculative  gains.  ^ 

We  come  next  to  modifications  in  the  treatment  of  gifts 
and  inheritances.  This  is  one  of  the  great  world  move- 
ments of  the  age,  which  attracts  inadequate  attention 
at  the  present  time.  We  not  only  have  the  taxation  of 
gifts  and  inheritances,  but  we  have  a  regulation  apart 
from  taxation.  This  is  the  most  important  of  all  the 
modifications  in  the  modes  of  acquisition  of  wealth, 
provided  we  take  into  account  positively  existing  forces 
rather  than  wishes  and  aspirations  manifested  in  the 
various  agitations  going  forward  in  our  day.  If  we  take 
these  into  account,  we  should  find  that  more  impor- 
tant forces  are  suggested;  but  when  we  consider  those 


DEVELOPMENT  OF  PRIVATE  PROPERTY  395 

actually  in  operation,  we  cannot  find  any  of  them  more 
important  than  this,  and  it  is  curious  that  there  is  so 
little  discussion  of  it,  especially  as  there  is  a  great  deal 
of  action  in  the  matter.^ 

We  find  revealed  in  these  movements  concerning  the 
acquisition  and  development  of  private  property  two 
tendencies  which  are  not  quite  the  same.     We  have: 

First,  a  general  tendency  to  reduce  or  cut  off  the  pri- 
vate receipt  of  most  kinds  of  surplus  value,  while  a 
strong  special  tendency  may  be  discovered  to  increase 
the  surplus  value  going  to  labour. 

Second,  the  tendency  to  reduce  to  lower  terms  in- 
dividually unearned  incomes. 

By  surplus  value  the  author  means,  briefly,  the  sur- 
plus over  and  above  what  we  may  call  normal  returns 
to  those  who  supply  capital  and  labour  and  to  enter- 
prise,— ^or  to  express  it  differently,  a  surplus  beyond  the 
returns  necessary  to  secure  the  cooperation  of  the  per- 
sons furnishing  the  factors  or  requisites  of  production. 
Economic  surplus  as  here  employed  may  be  formally 
defined  as  follows: 

By  an  economic  surplus,  as  here  used,  may  he  under- 
stood a  gain  over  and  above  such  a  return  to  the  owners 
of  the  factors  of  production  as  will  induce  them  to  do 
their  part  in  the  work  of  production.  Their  part  in  the 
work  means  that  they  must  take  up  the  work  and  con- 
tinue it.  A  certain  return  to  the  owners  of  each  req- 
uisite in  production  is  required  in  order  to  induce  them 
to  continue  their  part.  For  example:  Let  us  suppose 
that  we  pay  labour  five  cents  a  day  wages;  this  will  not 
induce  labour  to  play  its  part  in  production,  for  the 


396    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

simple  reason  that  labour  cannot  continue  its  part; 
this  would  mean  death.  Let  us  suppose  that  we  pay 
highly  qualified  labour  a  dollar  a  day;  that  will  not  in- 
duce highly  qualified  labour  to  do  its  part,  because  it 
is  impossible  for  it  to  do  its  part  for  a  dollar  a  day;  it 
will  cease  to  exist.  Such  a  remuneration  is  not  enough 
to  make  it  possible  for  men  to  produce  the  qualifications. 
In  order  to  secure  talent,  capital,  and  land,^  we  must 
have  a  certain  return  to  offer,  but  over  and  above  the 
return  necessary  to  secure  the  cooperation  of  the  req- 
uisites of  production,  we  frequently  find  a  surplus, 
and  there  is  a  general  tendency  to  cut  off  the  private 
receipt  of  this  surplus  value. 

Let  us  take  as  a  further  illustration  of  surplus  value 
the  financial  distribution  of  a  certain  city  passenger 
railway  company  at  one  time.  The  stock  of  the  com- 
pany was  then  paying  about  25%  upon  actual  in- 
vestment. This  was  after  defraying  the  expenses  of 
labour  and  paying  salaries  and  fixed  charges.  At  the 
same  time  the  bonds  which  bore  5%  were  at  a  consider- 
able premium,  the  writer  remembering  one  quotation 
of  111.  Of  course  the  returns  to  stocks  should  be  higher 
than  the  returns  to  bonds,  inasmuch  as  interest  on 
bonds  must  be  paid  first;  but  even  making  allowance 
for  this,  we  find  a  considerable  surplus  value  over  and 
above  the  returns  which  were  necessary  to  secure  the 
cooperation  of  all  the  factors  participating  in  the  in- 
industry.^  This  is  adduced  simply  as  an  illustration  of 
surplus  value.  But  another  matter  is  still  to  be  con- 
sidered,— the  initial  risk.  Perhaps  the  25%  involves 
no  surplus  in  the  sense  in  which  the  term  has  here  been 


DEVELOPMENT  OF  PRIVATE  PROPERTY  397 

used;  possibly  it  was  necessary  at  the  start  to  make 
such  terms  to  secure  the  cooperation  of  all  the  factors, 
to  get  the  capital;  the  risk  may  have  been  great. 

The  second  tendency  is  to  reduce  to  lower  terms  in- 
dividually unearned  incomes.  In  the  author's  earlier 
notes  he  used  the  expression  ''a  tendency  to  eliminate" 
unearned  income,  but  this  implied  too  much.  While 
there  is  no  tendency  in  that  direction,  there  is  a  tendency 
to  reduce  it  to  lower  terms;  to  eliminate  unearned  in- 
come might  often  mean  to  abolish  inheritance,  for  in- 
heritance frequently  means  an  unearned  income.  But 
there  unquestionably  exists  a  tendency  to  decrease  in- 
dividually unearned  incomes. 

One  or  two  other  illustrations  emphasise  the  idea  of 
surplus  value  more  clearly.  Chautauqua,  New  York, 
the  gathering  place  of  the  Chautauqua  Assembly,  il- 
lustrates admirably  what  is  being  attempted  through- 
out the  civilised  world  in  this  respect.  The  Chautauqua 
management  attempts  to  cut  off  the  private  receipt  of 
surplus  value  by  an  ingenious  sort  of  taxation.  It  goes 
under  the  name  not  of  taxation  but  of  payment  for  priv- 
ileges. If  anyone  does  any  business  within  the  en- 
closure at  Chautauqua  he  is  obliged  to  pay  to  the  Chau- 
tauqua management  for  the  privilege  of  doing  business 
in  this  summer  city  a  sum  which  it  is  supposed  leaves 
him  returns  for  labour  and  capital  and  enterprise  but 
nothing  more.  The  intention  is  to  give  to  each  factor 
of  production  upon  the  grounds  simply  enough  to  induce 
it  to  continue  its  part  in  production.  The  butcher, 
for  example,  will  be  paid  enough  to  induce  him  to  con- 
tmuc  his  services;  anything  over  and  above  that  he 


398    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

will  have  to  pay  to  the  Chautauqua  Assembly.  It  is 
attempted  to  ascertain  this  amount  by  asking,  What 
will  you  do  for  it?  If  one  having  the  privilege  is  ap- 
parently paying  too  little,  an  attempt  wiU  be  made  to 
induce  somebody  else  to  take  the  privilege  and  pay 
more  for  it,  and  if  no  one  else  will  take  it,  the  refusal 
tends  to  show  that  the  charge  is  adequate.  Generally 
the  dealers  are  shrewd  enough  not  to  make  the  mistake 
of  paying  too  much.  Although  more  or  less  complaint 
is  heard,  the  dealers  continue  to  do  the  work,  thus 
showing  that  the  amount  which  they  receive  is  a  suffi- 
cient inducement.  The  surplus  value  flowing  into  the 
Chautauqua  treasury  is  used  for  general  educational 
work  and  accrues  to  the  benefit  of  society. 

At  the  World 's  Fair  at  Chicago  in  1893  a  large  income 
was  derived  from  the  concessions,  so-called.  But  the 
whole  aim  of  the  management,  expressed  scientifically, 
was  simply  to  cut  off  the  private  receipt  of  surplus 
value,  exactly  what  is  being  done  on  the  grounds  of 
Chautauqua.^  This  description  simply  shows  how  the 
management  pared  off  for  themselves  every  time  a  sur- 
plus over  and  above  such  return  to  the  factors  in  pro- 
duction as  would  induce  them  to  continue  their  part 
in  production.^ 

This  cutting  off  of  the  private  receipt  of  surplus  value 
and  reducing  to  lower  terms  private  receipt  of  un- 
earned income  are  parts  of  a  still  larger  movement 
which  has  been  at  work  for  centuries,  namely,  the  equal- 
isation of  opportunities.  But  this  is  something  very 
different  from  the  movement  toward  economic  equality. 
We  have  been  moving  toward  equality  of  opportunity; 


DEVELOPMENT  OF  PRIVATE  PROPERTY  399 

we  have  not  reached  it,  but  we  are  approaching  it.  And 
this  thought  was  very  dear  to  the  founders  of  the  Amer- 
ican Repubhc,  especially  to  men  of  the  Jefferson  type. 
This  is  why  they  wanted  to  abolish  monopolies  of  the 
old  sort  which  were  granted  by  sovereigns  to  favourites. 
The  sources  of  inequality  of  opportunity,  as  the  Fathers 
of  this  Republic  saw  them,  were  largely  political,  and 
as  a  matter  of  fact  in  those  days  they  were  indeed 
largely  political.  Political  inequalities  were  the  most 
obvious  inequalities,  so  political  inequalities  were  abol- 
ished. But  since  that  time  conditions  of  industrial 
development  have  changed,  and  those  who  are  working 
in  the  same  spirit  to-day  are  turning  their  attention  to 
inequalities  in  economic  opportunity.  These  are  the 
most  serious  at  the  present  time.  Consider  the  steps 
taken  since  our  Republic  was  established.  Political 
inequalities  have  been  abolished,  but  that  was  not 
enough.  Then  our  forefathers  opened  up  the  land  to 
all  and  we  had  free  land.  It  seemed  for  a  time  as  if  that 
must  afford  an  approximation  towards  an  equality  of 
opportunity.  But  further  measures  were  still  needed. 
It  became  apparent  that  intellectual  training  carried 
with  it  power  and  that  the  one  who  lacked  intellectual 
training  lacked  opportunity.  So  we  established  our 
free  schools,  abolishing  tuition,  in  many  States  a  still 
further  step  was  taken  in  providing  free  textbooks,  and 
now  it  is  proposed  that  free  lunches  should  be  provided 
for  those  who  need  them  because  it  is  seen  that  some  of 
the  poorer  children  are  so  ill  nourished  that  they  cannot 
improve  the  opportunities  afforded  by  public  schools. 
That  is  combatted,  just  as  the  earher  idea  of  free  schools 


400    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

was  combatted.  But  whatever  may  be  said  about  it, 
whether  it  is  desirable  or  undesirable,  it  is  simply  in 
line  with  this  general  movement.  Thus  besides  the 
tendency  to  cut  off  the  private  receipt  of  surplus  value, 
the  efforts  being  made  along  so  many  lines  are  simply 
part  and  parcel  of  that  movement  which  tends  toward 
equalisation  of  opportunity. 

The  economic  theories  of  surplus  value  have  the 
closest  connection  with  the  struggle  for  equahty  of  op- 
portunity, and  illustrate  the  general  relation  between 
hfe  and  all  philosophical  theories  which  have  vitaUty. 
Produced  by  life,  they  react  on  life.  The  thinkers  who 
have  developed  theories  of  surplus  value  have  them- 
selves used  these  theories  in  their  struggles  to  secure 
equality  of  opportunity,  as  understood  by  them,  even 
if  mistakenly  understood;  or  if  they  themselves  have 
not  tried  to  apply  their  theories  to  actual  life  others 
have  arisen  to  make  such  a  use  of  these  theories.  The 
general  aim  has  been  to  reduce  at  least  to  lower  terms 
individually  unearned  incomes  or  those  conceived  to 
be  individually  unearned,  and  thus  to  bring  about  a 
nearer  approximation  to  equality  of  opportunity.  The 
history  of  theories  of  surplus  value  is  a  long  one,  never 
yet  satisfactorily  written,  and  this  is  not  the  place  to 
attempt  anything  at  all  exhaustive. 

Let  us,  however,  at  this  point  take  the  briefest  pos- 
sible review  of  the  thought  of  surplus  value  among  the 
economists,  for  the  idea  itself,  under  different  names,  is 
as  old  as  the  science  of  economics,  but  has  undergone 
change  and  development. 

First  of  all,  we  must  distinguish  between  different 


DEVELOPMENT  OF  PRIVATE  PROPERTY  401 

ideas  of  surplus.  We  notice  here  four  different  ideas  of 
surplus.  We  have  surplus  as  defined,  which  we  will  call 
the  economic  surplus  in  the  narrower  sense  of  the  term,  by 
which  we  mean  an  excess  over  and  above  what  is  required 
to  secure  the  application  of  the  requisites  of  production. 

Second,  there  is  a  larger  sense  in  which  we  use  the 
term.  It  may  be  used  to  mean  a  surplus  over  and 
above  something  received  by  a  non-privileged  class, 
even  if  we  do  not  attach  any  idea  of  disapprobation 
to  the  existence  of  a  privileged  class.  And  this  need 
not  mean  the  same  thing  as  the  surplus  in  the  narrower 
and  stricter  sense  of  the  word.  We  might  have  this 
surplus  and  yet  it  might  not  be  over  and  above  what  is 
necessary  to  secure  the  cooperation  of  the  requisites  of 
production,  or  of  one  or  more  of  the  requisites.  In  this 
sense  we  would  say  that  interest  is  a  surplus  over  and 
above  what  is  received  by  the  non-interest  receiving 
class,  and  yet  it  may  be  true  that  interest  is  necessary 
to  secure  the  requisite  accumulation  and  use  of  capital. 

Third,  when  we  discuss  the  wealth  of  society  at  large, 
or  of  a  particular  portion  thereof,  we  sometimes  con- 
sider surplus  to  mean  a  surplus  over  and  above  general 
subsistence,  if  we  may  use  such  a  term;  for  example, 
the  surplus  of  the  coromunity;  but  this  use  has  not  led 
to  any  special  theory  of  surplus  value. 

Fourth,  we  have  the  idea  of  surplus  value,  advanced 
by  Karl  Marx  and  entertained  by  many  socialists, 
which  is  still  somewhat  different.  By  surplus  value 
Karl  Marx  means  the  surplus  produced  by  the  worker 
over  and  above  what  he  receives.  Karl  Marx  claims 
that  the  production  of  value  is  due  to  labour,  but  that 


402    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  labourer  does  not  receive  the  full  product  of  his 
work,  and  that  over  and  above  what  he  receives  there 
is  a  surplus  enjoyed  by  other  classes  of  society. 

The  first  idea  here  given  of  a  surplus,  that  in  the 
narrower  sense,  is  what  we  must  regard  as  the  idea  of 
surplus  value  in  the  strict  sense  of  the  word,  and  it  is 
that  to  which  we  will  give  special  attention. 

But  let  us  now  observe  the  growth  of  the  idea  of 
surplus  in  this  narrow  and  strict  sense  of  the  term. 
This  idea  of  the  surplus  in  the  narrower  sense  was  in- 
troduced into  economic  literature  by  the  Physiocrats.^ 
They  regarded  rent  as  a  surplus  in  this  narrow  sense. 
It  was,  they  thought,  a  surplus  accruing  to  the  individ- 
ual; not  something  that  could  be  abolished  socially,  for 
it  came  as  a  necessary  result  of  the  characteristics  of 
land.  But  the  private  receipt  of  rent,  even  if  desirable, 
was  held  to  be  needless;  in  other  words  a  surplus.  Rent 
would  also  be  a  surplus  in  the  larger  sense, — a  surplus 
enjoyed  by  a  privileged  class,  an  excess  over  what  was 
enjoyed  by  the  non-privileged  class.  This  idea  of  rent 
as  a  surplus  was  also  entertained  by  the  followers  of  the 
Physiocrats,  by  Adam  Smith  and  the  classical  econ- 
omists and,  generally  speaking,  by  the  sociaHsts.  But 
Adam  Smith  enlarged  the  idea  of  a  sm-plus,  by  the  in- 
clusion of  interest  in  surplus.  In  one  place  he  speaks 
of  profits  (undifferentiated  from  interest)  as  surplus, 
as  something  abstracted  from  the  products  of  labour. 
He  says  that  in  the  natural  state  of  society,  preceding 
the  appropriation  of  land  and  the  accumulation  of 
capital,  the  entire  production  of  labour  belonged  to 
labour,  and  that  if  this  natural  condition  had  continued, 


DEVELOPMENT  OF  PRIVATE  PROPERTY  403 

it  would  not  have  been  necessary  for  labour  to  share 
its  earning  with  land  owners  and  capitalists.  In  this 
way,  therefore,  we  might  call  rent  and  profits  a  surplus 
over  and  above  what  accrues  to  labour,  a  surplus  some- 
what in  the  sense  in  which  Karl  Marx  uses  the  term, 
although  Adam  Smith  does  not  necessarily  attach  dis- 
approbation to  the  idea  of  surplus,  and  certainly  not 
when  it  means  profits.  And  it  must  be  remembered 
that  Adam  Smith's  theoretical  ideas  are  not  to  be 
gathered  from  what  he  says  about  an  imaginary  natural 
condition  of  society.  It  is  to  be  noticed  further  that 
in  the  discussion  of  taxation  Adam  Smith  differentiates 
interest  and  profits,  and  says  that  the  former,  viz., 
interest,  is  a  non-get-at-able  surplus.^"  But  he  would 
call  rent  a  get-at-able  surplus,  and  he  does  by  impli- 
cation attach  a  certain  disapprobation  to  the  receipt 
of  rent  because  he  says  the  landlords,  like  other  men, 
love  to  reap  where  they  have  never  sown,  and  to  have 
a  return  without  any  exertion. 

We  may  say  that  Ricardo  somewhat  enlarged  the 
idea  of  a  surplus.  It  would  appear  that  profits,  accord- 
ing to  Ricardo,  could  be  regarded  to  some  considerable 
extent  as  a  surplus.  Ricardo's  idea  of  interest  includes 
a  surplus  over  and  above  what  is  necessary  to  induce 
capital  to  continue  its  work.  This  is  shown  quite  clearly 
in  that  chapter  in  Ricardo's  treatise.  Principles  of  Po- 
litical Economy  and  Taxation,  in  which  he  discusses 
"Gross  and  Net  Revenue"  (Chap.  XXVI).  He  recog- 
nised there  that  sometimes  even  the  wages  of  labour 
may  contain  a  surplus,  but  generally,  he  says,  the  wages 
of  labour  are  necessary  to  induce  labour  to  continue 


404    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

its  work  in  production.  This  is  his  idea  of  normal  wages. 
Now  it  is  not  necessary  that  there  should  be  any  private 
receipt  of  rent,  because  the  work  of  production  goes  on 
on  the  margin,  so  that  without  the  private  receipt  of 
rent,  the  work  of  production  would  still  go  on.  Nor 
would  it  seem  to  be  necessary  that  there  should  be  any 
definite  return  to  the  owner  of  capital.  Capital  will 
take  what  it  can  get,  and  that  is  determined  by  the 
margin  of  production.  All  that  is  produced  on  this 
margin  must  of  necessity  be  divided  between  labour  and 
capital.  What  labour  receives,  according  to  the  Ricar- 
dian  law,  is  a  fixed  sum,  and  what  capital  receives  is 
the  difference  between  what  labour  receives  and  what 
is  produced  on  the  margin.  So  that  according  to  Ri- 
cardo  a  very  considerable  part,  if  not  almost  the  whole, 
of  profits  would  be  surplus.  He  seems  to  imply  that  a 
certain  amount  of  profits  must  be  placed  among  costs. 
Rent  and  profit  constitute  net  revenue  and  a  nation's 
power  "of  supporting  fleets  and  armies,  and  all  species 
of  unproductive  labour  must  be  in  proportion  to  its  net, 
and  not  in  proportion  to  its  gross  income,"  ''the  power 
of  paying  taxes  is  in  proportion  to  the  net,  and  not  in 
proportion  to  the  gross  revenue." ^^  We  must  say,  there- 
fore, that  Ricardo  had  much  the  same  idea  of  a  surplus 
that  Adam  Smith  had,  enlarging  it  only  slightly;  but  he 
especially  contributed  to  the  growth  of  the  socialistic 
idea  of  surplus  by  the  logical  method  of  his  reasoning. 
After  the  Physiocrats,  however,  the  man  who  con- 
tributed most  to  the  idea  of  a  surplus  was,  perhaps, 
Nassau  Senior.  He  looked  upon  rent  as  individual 
surplus,  but  he  enlarged  very  greatly  the  idea  of  rent 


DEVELOPMENT  OF  PRIVATE  PROPERTY  405 

and  he  included  under  rent  the  income  yielded  by  in- 
herited wealth,  considering  this  income  to  be  a  part  of 
surplus.  All  income  which  is  not  a  return  for  effort  and 
sacrifice  Senior  regards  as  surplus.  Wages  are  a  return 
for  sacrifice,  and,  according  to  Senior,  profits  are  a 
return  for  sacrifice.  The  sacrifice  of  the  capitalist  is 
abstinence,  and  for  this  sacrifice  he  receives  a  return 
called  profits  (interest).  Consequently,  in  the  strict 
and  narrow  sense  of  the  term,  according  to  Senior,  in- 
terest should  not  be  regarded  as  a  surplus,  but  as  a  re- 
turn for  a  pecuHar  sacrifice  which  he  designates  as 
abstinence.  Senior  defines  rent  as  "the  revenue  spon- 
taneously offered  by  nature  or  accident."  And  he 
says,  ''If  wages  and  profits  are  to  be  considered  as  the 
rewards  of  peculiar  sacrifices,  the  former,  the  remu- 
neration for  labour,  and  the  latter  for  abstinence  from 
immediate  enjoyment,  it  is  clear  that  under  the  term 
rent  must  be  included  all  that  is  obtained  without  any 
sacrifice;  or,  which  is  the  same  thing,  beyond  the  remu- 
neration for  that  sacrifice;  all  that  nature  or  fortune 
bestows,  either  without  any  exertion  on  the  part  of  the 
recipient,  or,  in  addition  to  the  average  remuneration 
for  the  exercise  of  industry  or  the  employment  of  capi- 
tal."i2 

We  notice  that  he  says  that  under  the  term  rent  must 
be  included  all  that  is  obtained  without  any  sacrifice, 
or  beyond  the  remuneration  for  that  sacrifice, — what 
we  might  call  a  normal  return  for  sacrifice.  He  does 
not  express  the  idea  very  clearly,  but  what  he  describes 
is  what  we  call  surplus  value.  What  he  calls  rent  is 
something  over  and  above  what  is  necessary  to  induce 


406    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  factors  of  production  to  continue  their  part  in  the 
work  of  production.  The  revenue  from  a  dock  or  wharf, 
for  example,  Senior  calls  profit,  when  in  the  hands  of  the 
original  constructor,  because  it,  with  wages,  is  necessary 
to  induce  the  factors  of  production  to  construct  the 
docks  and  wharf,  and  he  calls  part  wages  and  part  prof- 
its. But  when  the  dock  or  wharf  passes  over  to  the 
heirs  of  the  constructor,  then  it  has  all  the  attributes  of 
rent,  because  the  income  which  it  brings  in  to  the  heir 
is  not  a  return  for  sacrifice.  The  original  constructor 
has  received  his  reward.  To  the  heir  it  is  the  gift  of 
fortune,  not  the  reward  of  sacrifice.  It  is  in  this  way 
that  Senior  on  the  one  hand  cuts  down  the  idea  of  sur- 
plus value,  removing  interest  in  the  case  of  the  saver, 
but  on  the  other  hand  enlarges  very  greatly  the  idea 
of  rent  or  surplus  value  by  adding  inherited  wealth,  or 
any  profits  which  would  be  in  excess  of  the  ''average 
return ".^^  He  also  includes  any  surplus  earnings  due 
to  extraordinary  talent  and  the  returns  due  to  fortune 
or  chance,  or  what  we  would  technically  call  the  gains 
of  conjuncture.  These  are  his  words:  "Such  are  the 
fortuitous  profits  of  the  holders  of  warlike  stores  on  the 
breaking  out  of  unexpected  hostihties;  or,  of  the  holders 
of  black  cloth  on  the  sudden  death  of  one  of  the  royal 
family.  Such  would  be  the  additional  revenue  of  an 
Anglesea  miner,  if,  instead  of  copper,  he  should  come 
on  an  equally  fertile  vein  of  silver.  The  silver  would, 
without  doubt,  be  obtained  by  means  of  labour  and  ab- 
stinence; but  they  would  have  been  repaid  by  an  equal 
amount  of  copper.  The  extra  value  of  the  silver  would 
be  the  gift  of  nature,  and  therefore  rent."^^ 


DEVELOPMENT  OF  PRIVATE  PROPERTY  407 

Tracing  this  idea  of  a  surplus  along  the  current  of 
economic  thought,  we  come  to  John  Stuart  Mill,  who, 
although  he  dwelt  upon  the  idea  of  a  surplus,  contracted 
it  somewhat  as  compared  with  Ricardo  and  Senior.  For 
John  Stuart  Mill  introduced  the  idea  of  minimum  prof- 
its. Ricardo  did  not  clearly  express  the  idea  of  a  cer- 
tain minimum  necessary  in  order  to  secure  the  applica- 
tion of  capital  to  industry.  It  would  seem,  according  to 
Ricardo,  that  there  was  scarcely  any  limit  to  the  pos- 
sible fall  in  profits,  but  John  Stuart  Mill  said  that  there 
was  a  certain  minimum,  because  if  we  go  below  that, 
the  reward  to  capital  would  not  be  sufficient  to  main- 
tain the  existing  amount  of  capital;  but,  on  the  con- 
trary, if  we  go  below  that  minimum,  then  the  amount  of 
capital  will  decrease.  Thus  in  this  way  the  idea  of  a 
surplus  was  narrowed.  According  to  this  idea,  any 
return  upon  capital  in  excess  of  the  minimum  would 
have  to  be  looked  upon  as  a  possible  surplus,  not  neces- 
sarily a  surplus  at  a  given  time  and  place. 

We  then  return  to  the  idea  of  an  economic  surplus 
in  the  narrow  sense.  This  economic  surplus  may  be 
divided  into  four  parts.  The  surplus  is  a  return  over 
and  above  normal  wages  and  profits  (including  interest), 
consisting  of 
I.  Rent. 
II.  Interest  (in  part). 

III.  Gains  of  monopoly. 

IV.  The  surplus  gains  of  conjuncture. 
V.  Personal  surplus.  ^^ 

It  is  impossible  here  and  now  to  treat  these  economic 
categories,  for  that  belongs  elsewhere  in  the  distribution 


408    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

of  wealth,  and  we  must  assume  some  familiarity  with  the 
elements  of  economics.  By  rent,  it  may  be  said,  we 
here  mean  primarily  land  rent,  as  used  by  the  classical 
economists,  including  the  rents  for  natural  powers  as- 
sociated with  land.  The  interest  rate  is  high  enough  to 
afford  a  recompense  for  marginal  waiting;  in  other  words 
the  waiting  that  would  not  take  place  were  the  rate  of 
interest  lower  than  it  is.  But  for  other  waiting  there  is 
a  surplus  beyond  what  is  necessary  to  secure  the  induce- 
ment. With  a  lower  rate,  there  are,  indeed,  many  who 
would  save  even  more  than  they  do,  because  a  larger 
amount  of  capital  would  be  required  to  provide  an  in- 
come which  is  regarded  by  them  as  essential.  It  is  plain 
then,  that  in  interest  paid,  there  is  often  an  individual 
surplus,  and  in  income  taxes  a  part  of  this  is  regularly 
taken.  ^^ 

Monopoly  gains  as  here  understood  are  a  surplus  due 
to  the  absence  of  competition  and  are  over  and  above 
the  current  rate  of  competitive  profits.  ^^  They  cannot 
be  discussed  further  in  this  place. 

The  surplus  of  conjuncture  is  a  somewhat  less  famihar 
term  and  may  require  a  word  or  two.  We  mean 
the  gains  of  fortune,  not  to  be  foreseen,  which  bring 
to  the  individual  income  from  changes  beyond  his 
control.  Drought  or  flood  may  cause  abnormally 
high  prices,  bringing  great  gain  to  those  not  afflicted 
thereby. 

The  demand  for  crepe  and  mourning  material  gener- 
ally, in  the  case  of  the  sudden  death  of  a  sovereign  in  a 
monarchical  country,  is  a  typical  illustration,  aheady 
mentioned    in    the    quotation    from    Nassau    Senior. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  409 

Closely  connected  with  the  foregoing,  would  be  the 
gains  due  to  unforeseen  fluctuations  in  fashions.  ^^ 
Other  kinds  of  conjunctural  gains  will  occur  to  the 
reader  as  a  result  of  reflection  and  observation. 

Personal  surplus  signifies  unusual  returns  due  to  su- 
perior abihty,  and  a  part  of  this  is  taken  for  public  pur- 
poses where  an  income  tax  exists  in  addition  to  what  is 
taken  in  taxation  by  indirect  processes.  Not  all  of  the 
earnings  of  those  who  receive  incomes  above  the  aver- 
age or  even  far  above  the  average  may  be  regarded  as 
surplus.  We  have  to  consider  the  costs  of  production 
in  many  cases,  the  expensive  training  of  a  highly  skilled 
physician,  for  example;  and  also  we  must  remember  that 
in  so  far  as  higher  earnings  are  necessary  to  produce  the 
supply,  they  are  also  a  part  of  the  costs  of  production. 
Here  as  elsewhere  a  difference  is  also  found  between 
what  can  be  taken  through  taxation  by  a  particular 
locality,  a  state,  a  nation,  and  by  the  world  at  large.  If 
talent  is  encouraged  in  one  place  and  discouraged  in 
another,  the  first  place  is  likely  to  attract  it  and  the 
second  to  lose  it.  But  we  cannot  enter  into  many  re- 
finements here. 

We  have  also  here  as  elsewhere  to  distinguish  be- 
tween the  individual  point  of  view  and  the  social  point 
of  view.  To  the  individual  who  pays  for  land,  that 
payment  or  the  interest  on  it  constitutes  a  cost  of 
production,  and  the  rental  value  of  the  land  cannot 
be  taken  from  him  without  depriving  him  of  his  prop- 
erty. A  discrimination  would  be  exercised  against  him 
in  confiscation,  the  nature  of  which  will  be  later  con- 
sidered.   At  the  same  time,  from  the  point  of  view  of 


410    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

society,  the  rental  value  of  land  which  has  cost  nothing 
is  a  surplus  to  the  individual  who  receives  it. 

Now  various  classes  of  reformers  have  their  own  par- 
ticular methods  of  dealing  with  surplus  value  in  their 
efforts  to  secure  equality  of  opportunity.  The  socialists, 
generally  speaking,  would  use  all  surplus  gains  for  gen- 
eral pubhc  purposes,  especially  for  the  increase  of  wages, 
to  them  the  greatest  of  public  purposes.  The  single 
taxers  would  take  all  the  pure  rent  of  land  for  public 
purposes,  and  thus  abolish  private  property  in  land,  for 
this  would  no  longer  exist  in  any  true  sense  after  the 
value  had  been  absorbed  in  taxation. 

Civilised  society  at  large,  as  seen  in  the  movements  of 
progressive  governments,  is  reducing  to  lower  terms  sur- 
plus value  in  what  we  term  its  narrow  or  scientific  mean- 
ing. Private  monopoly  in  particular  is  being  either  abol- 
ished or  so  regulated  as  to  remove  the  privileged  position 
of  the  monopolists.  The  land  owner  in  America,  in 
particular,  is  already  bearing  the  lion's  share  of  pubUc 
burdens  ^^  of  all  the  governments  except  the  federal, 
and  we  observe  a  clear  inclination  to  scrutinise  more 
and  more  closely  all  his  gains.  Many  cities  in  Europe 
are  imposing  increment  taxes  and  taking  a  portion  of 
the  increases  in  land  values  when  sales  are  made.  We 
thus  notice  a  world-wide  movement  in  the  direction  of 
equality  of  opportunity  with  respect  to  property  and 
income  which  finds  expression  in  one  mode  or  another 
of  dealing  with  surplus  value.  ^"^ 

But  one  thing  is  clear:  Up  to  the  present  time  the 
movement  for  equahty  of  opportunity  finds  its  sharp 
limitations  in  property,  contract,  inheritance,  and  vested 


DEVELOPMENT  OF  PRIVATE  PROPERTY  411 

rights.  Society  shows  no  inclination  to  consent  to  the 
aboUtion  of  these  fundamental  institutions.  It  holds  to 
the  view  that  general  loss  and  not  gain  would  result  there- 
from. There  might  be  a  nearer  approach  to  equality, 
but  it  is  held  that  this  equality  would  be  on  a  far  lower 
plane  of  economic  well-being  than  that  which  now  exists. 


Notes  and  References  to  Chapter  XVI 

'  P.  391.  As  an  illustration  of  cutting  down  profits  we  may  again 
mention  the  regulation  of  public  utilities  by  the  Wisconsin  Railroad 
Commission.  Of  course  the  common  law  rule  that  rates  must  be 
reasonable  has  always  apphed.  However,  it  was  not  imtil  com- 
missions were  created  to  enforce  this  rule  that  it  was  really  made 
effective. 

2  P.  393.  Wisconsin  Railroad  Commission  Reports,  Vol.  Ill, 
pp.  778,  793,  Menominee  and  Marinette  Light  and  Traction  Com- 
pany; see  also  reference  to  the  same  case  in  Howard  T.  Lewis's  art. 
on  "Interest  and  Profits  in  Rate  Regulation,"  Political  Science 
Quarterly,  Vol.  XXVII,  No.  2,  pp.  253,  254. 

'  P.  394.  It  is  the  author's  intention  to  treat  this  subject  more 
fully  in  his  work  on  Landed  Property  and  the  Rent  of  Land. 

^  P.  395.  Early  in  the  nineteenth  century  we  had  a  large  amount 
of  discussion  but  comparatively  Uttle  action.  It  is  suggested  that 
this  is  what  often  happens.  At  first  we  have  a  great  deal  of  discus- 
sion of  a  subject  but  no  action;  and  then  when  the  discussion  has 
subsided  men  begin  to  act.  This  is  the  case  with  regard  to  inheri- 
tance at  any  rate.  The  subject  was  much  discussed,  especially 
by  the  socialists,  before  it  apparently  produced  any  effect.  Saint- 
Simon,  a  French  socialist,  who  lived  in  the  first  part  of  the  nine- 
teenth century,  according  to  Professor  Lorenz  von  Stein,  made  the 
question  a  thoroughly  live  one.  Von  Stein  makes  this  assertion 
concerning  the  activity  of  Saint-Simon  in  this  direction:  "He  first 
brought  forward  the  question  of  inheritance,  the  question  upon 
the  discussion  of  which  the  entire  future  of  the  social  form  of  Europe 
will  rest  during  the  next  two  generations."  (L.  von  Stein,  Ges- 
chichte  der  sozialen  Beivegung  in  Frankreich,  Vol.  II,  pp.  226-7. 
Quoted  in  Ely's  French  and  German  Socialism,  p.  80).  Von  Stein 
said  this  in  about  1850.  The  movement,  however,  has  not  gone 
so  rapidly  as  he  thought  it  would  go. 

^  P.  396.  In  the  case  of  land,  the  institution  of  private  property 
in  land  is  taken  for  granted  in  this  place.  As  things  stand  he  who 
wants  land  must  pay  for  it,  just  as  he  must  pay  for  machinery. 

412 


DEVELOPMENT  OF  PRIVATE  PROPERTY  413 

*P.  396.  It  cannot  be  said  offhand  how  great  is  the  surplus 
value  in  a  case  of  this  kind.  Necessary  supply  costs  must  include 
a  return  for  risks  incurred,  and  sometimes  a  high  return  is  simply 
a  promised  reward  for  apparentl}'  great  risks.  Plowever,  we  know 
that  in  many  cases  society  has  made  bad  bargains,  resulting  in  the 
private  receipt  of  large  amounts  of  surplus  value. 

^  P.  398.  There  hes  before  the  writer  a  copy  of  a  quotation  from 
the  Chicago  Tribune  in  which  this  process  of  granting  concessions 
is  described.    The  headings  are  as  follows: 

ECONOMIC  SURPLUS 
OUT  OF  CONCESSIONS 

Big  Income  to  the  World's  Fair  from  this  Source 

SOME   ABLE   FINANCIERING 

THE   WATS  AND   MEANS   COMMITTEE   MAKE   A   GOOD   RECORD 

THEY  KNOW   HOW  TO   BARGAIN 

CONCESSIONAIRES  MADE   TO   PAY  FOR   WHAT  WHEY   GET 

(Editorial  sheet,  Chicago  Daily  Tribune,  January  14,  1893.) 

Then  follows  a  detailed  and  interesting  description  of  estimated 

receipts. 

8  P.  398.  For  a  treatment  of  equalisation  of  opportunities,  cf. 
chapter  on  "  Rivalry  and  Success  in  Economic  Life"  in  the  author's 
work  The  Evolution  of  Industrial  Society,  Part  II,  Chap.  II. 

'P.  402.  For  a  discussion  of  the  Physiocrats  see  Haney's 
History  of  Economic  Thought,  Chap.  IX. 

w  P.  403.  Wealth  of  Nations,  Book  V,  Chap.  II,  Pt.  II,  Art.  II, 
p,  332,  ed.  Cannan. 

"  P.  404.  Ricardo,  Principles  of  Political  Economy  and  Taxation, 
ed.  Conner,  pp.  336,  337. 

12  P.  405.  Senior,  Political  Economy,  pp.  128,  91-2. 

1' P.  406.  This  is  not  accurate,  for  "average"  returns  would 
include  Senior's  surplus.    He  really  means  normal  marginal  returns. 

i<  P.  406.  Op.  cit.,  p.  129. 

"  P.  407.  Mr.  J.  A.  Hobson,  in  his  book  Economics  of  Distribution, 
and  elsewhere,  elaborates  the  idea  of  a  surplus  in  bargaining.    The 


414    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

present  writer  is  unable  to  look  upon  this  as  a  separate  and  dis- 
tinct sort  of  surplus.  It  seems  rather  to  be  the  channel  through 
which  various  kinds  of  surplus  find  expression;  for  example,  the 
gains  of  the  monopolist,  the  rent  of  the  land  owner,  at  times  even 
the  wages  of  labour.  Superior  economic  strength  manifests  it- 
self in  the  bargain;  but  the  bargain  is  not  the  chief  cause  of  the 
superiority.  Naturally  it  would  take  us  too  far  afield  to  give  further 
reasons  for  this  view. 

"  P.  408.  Ely's  Outlines  of  Economics,  revised  ed..  Chap.  XXIV, 
"Interest,"  especially  pp.  416-422. 

1^  P.  408.  See  the  author's  Monopolies  and  Trusts  and  his  Outlines 
of  Economics  if  a  further  treatment  of  his  views  is  desired. 

18  P.  409.  Louise  of  Tuscany,  former  Crown  Princess  of  Saxony, 
tells  us  in  her  memoirs  that  she  once  wore  at  the  opera  a  dress 
somewhat  out  of  the  ordinary,  which  so  pleased  the  public  that 
almost  immediately  the  entire  supply  of  the  material  in  Dresden  was 
exhausted. 

19  P.  410.  See  Ely  before  the  Verein  far  Sozialpolitik,  Nuremberg 
meeting,  October,  1911. 

20  P.  410.  This  is  only  one  of  the  numerous  places  referred  to 
in  the  Preface  where  the  author  has  been  obliged  to  cut  severely 
this  manuscript  and  exercise  great  self-restraint  to  avoid  an  undue 
expansion  of  the  present  volume. 


CHAPTER  XVII 

THE   PRESENT  AND   FUTURE   DEVELOPMENT   OF   PRIVATE 

PROPERTY  (Continued) :  the  regulation  of  in- 
heritance 

As  already  remarked,  we  use  inheritance  in  the  large 
sense,  including  bequests.  We  mean  simply  the  trans- 
mission of  property  from  generation  to  generation. 
Once  in  a  generation  the  bulk  of  property  changes  hands 
by  death,  and  admittedly  it  may  be  regulated  by  legis- 
lation without  limit.  By  legislation  in  a  country  like 
the  United  States,  we  mean  constitutional  provisions 
as  well  as  ordinary  statute  law. 

First  of  all  let  us  notice  a  distinction  made  by  Black- 
stone,  and  recognised  by  our  courts,  between  private 
property  and  inheritance.  We  have  here  to  do  with 
two  distinct  rights  and  not  with  one  right.  There  is  an 
inclination  to  put  the  two  together,  but  we  cannot  do 
that.  Private  property  means  the  right  to  exclusive 
control,  and  inheritance  determines  how  this  right  shall 
pass  from  generation  to  generation.  Blackslone  says: 
''Naturally  speaking,  the  instant  a  man  ceases  to  be,  he 
ceases  to  have  any  dominion;  else  if  he  had  a  right  to  dis- 
pose of  his  acquisitions  one  moment  beyond  his  life,  he 
would  also  have  a  right  to  direct  their  disposal  for  a  mil- 
lion of  ages  after  him :  which  would  be  highly  absurd  and 

415 


416    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

inconvenient.  All  property  must  therefore  cease  upon 
death,  considering  men  as  absolute  individuals,  and  un- 
connected with  civil  society.  .  .  .  Wills,  therefore,  and 
testaments,  rights  of  inheritance  and  successions  are 
all  of  them  creatures  of  the  civil  or  municipal  laws,  and 
accordingly  are  in  all  respects  regulated  by  them;  every 
distinct  country  having  distinct  ceremonies  and  req- 
uisites to  make  a  testament  completely  valid;  neither 
does  anything  vary  more  than  the  right  of  inheritance 
under  different  national  establishments."  ^ 

Quite  in  line  with  this  we  find  an  utterance  of  the  late 
Sir  Wilham  Harcourt,  when  he  introduced  the  new 
''Death  Duties"  into  the  EngHsh  Parliament  in  1894, 
as  follows,  "Nature  gives  a  man  no  power  over  his 
earthly  goods  beyond  the  term  of  his  life;  what  power 
he  possesses  to  prolong  his  will  beyond  his  life — 'the 
right  of  a  dead  hand  to  dispose  of  property — is  a  pure 
creation  of  the  law,  and  the  State  has  the  right  to  pre- 
scribe the  conditions  and  the  limitations  under  which 
that  power  shall  be  exercised."  ^ 

This  is  also  the  view  of  the  Supreme  Court  of  the 
United  States,  according  to  which  the  state  can  tax 
inheritances  and  otherwise  regulate  them  as  it  sees  fit. 
In  the  well-known  case  of  Magoun  v.  Illinois  Trust  and 
Savings  Bank  (1897)  Mr.  Justice  McKenna,  speaking 
for  the  court,  used  these  words: 

''An  inheritance  tax  is  not  one  on  property,  but  one  on 
the  succession.  The  right  to  take  property  by  devise  or 
descent  is  the  creature  of  the  law,  and  not  a  natural  right — 
a  privilege  and  therefore  the  authority  which  confers  it  may 
impose  conditions  upon  it.    From  these  principles  it  is  de- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  417 

duced  that  the  States  may  tax  the  privilege,  discriminate 
between  relatives,  and  between  these  and  strangers,  and 
grant  exemptions;  and  are  not  precluded  from  this  power 
by  the  provisions  of  the  respective  State  constitutions  re- 
quiring uniformity  and  equality  of  taxation."  ^ 

Quite  as  emphatic  utterances  are  the  following  from 
the  State  courts  of  Virginia  and  North  Carolina.  In  the 
case  of  Eyre  v.  Jakob,  14  Grat.  422  (1858),  p.  430,  Mr. 
Justice  Lee,  of  Virginia,  declared: 

"It  (the  legislature)  may  to-morrow,  if  it  pleases,  abso- 
lutely repeal  the  statute  of  wills  and  that  of  descents  and 
distributions  and  declare  that  upon  the  death  of  a  party, 
his  property  shall  be  applied  to  the  payment  of  his  debts, 
and  the  residue  appropriated  to  public  uses." 

And  Mr.  Justice  Rodman,  of  North  Carolina,  in  Pullen 
V.  Commissioners,  66  N.  C.  368  (1872),  p.  363  laid  down 
the  following: 

"Property  itself  as  well  as  the  succession  to  it  is  the  crea- 
ture of  positive  law.  ,  .  .  The  right  to  give  or  take  property 
is  not  one  of  those  natural  and  inalienable  rights  which  are 
supposed  to  precede  all  government,  and  which  no  govern- 
ment can  rightfully  impair." 

But  Wisconsin  appears  to  be  almost  alone  among  the 
leading  States  in  the  attitude  that  its  Supreme  Court 
takes  towards  limitation  of  legislative  control  of  suc- 
cessions. First  it  holds  that  the  rule  of  equality  de- 
mands that  the  rate  of  progression  on  the  taxation  of 
inheritances  shall  be  based  on  the  shares  of  an  estate 
received,  and  not  on  the  estate  as  a  whole;  for  example, 
an  estate  of  a  million  dollars  going  to  one  son  must  be 


418    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

taxed  at  a  higher  rate  than  an  estate  of  a  milHon  dollars 
going  to  ten  sons.  In  the  latter  case  the  tax  must  be 
at  the  rate  established  for  one  hundred  thousand  dollars.'* 
The  result  of  this  application  of  the  rule  of  uniformity 
appears  to  be  fortunate  in  its  effect  upon  the  distribu- 
tion of  wealth;  but  in  the  same  case,  in  a  separate  opin- 
ion, Mr.  Justice  Marshall  voiced  a  view  of  natural  rights 
which  is  hardly  consistent  with  the  progressive  attitude 
of  this  court  in  recent  years.  In  this  separate  opinion 
he  uses  these  words: 

*'My  conclusions  are  that  the  species  of  legislation  under 
discussion  (inheritance  taxes)  caimot  be  justified  upon  the 
ground  that  there  is  no  natural  right  whatever  to  transmit 
property  by  inheritance;  that  the  ownership  of  property 
does  not  in  any  sense  rest  on  a  conditional  bestowal  thereof 
in  the  first  instance  by  sovereign  authority,  subject  to  the 
sovereign  resumption  of  ownership  upon  the  death  of  the 
owner  thereof  if  the  sovereign  so  wills;  that  a  succeed- 
ing private  owner  of  property  by  inheritance  does  not 
come  to  the  possession  of  the  same  in  any  sense  as  a  bene- 
ficiary of  a  sovereign  head.  The  absolute  title  of  the 
constitution  must  necessarily  be  considered,  I  think,  as  a 
title  by  right  absolute,  as  absolute  as  any  right  which  is 
subject,  as  all  are,  to  reasonable  regulations,  or  having,  as 
incidental  thereto,  not  the  mere  privilege,  but  the  right  in 
some  way  to  have  the  property  pass  to  a  private  successor 
in  case  of  the  death  of  the  owner  and  the  right  of  kindred  to 
have  it  so  pass.  We  repeat  what  has  been  said:  that  is  one 
of  the  prime  essentials  of  the  pursuit  of  happiness  declared 
in  the  constitution  to  be  an  inherent  possession  of  all  men. 
Who  could  define  the  constitutional  meaning  of  that  term 
and  leave  out  any  of  those  things  universally  supposed  to  be 
necessary  accompaniments  of  civilized  society?  The  social 
instinct  suggests  at  once  that  it  must  include,  as  incidental 


DEVELOPMENT  OF  PRIVATE  PROPERTY  419 

to  the  right  to  dwell  together  in  the  family  relation,  the  right, 
not  only  to  acquire  and  enjoy  property  in  the  physical  sense, 
but  to  have  the  mental  enjoyment  of  transmitting  it  to  others 
in  the  family  relation  under  such  reasonable  regulations  as 
legislative  wisdom  may  see  fit  to  impose."  ^ 

This  decision,  from  which  the  foregoing  extracts  are 
taken,  was  rendered  in  1902.  In  1906  the  inheritance  tax 
law  was  held  constitutional,  Mr..  Justice  Winslow  using 
these  words:  "That  the  right  to  take  property  by  in- 
heritance or  by  will  is  a  natural  right  protected  by  the 
constitution,  which  cannot  be  wholly  taken  away  or 
substantially  impaired  by  the  legislature."  The  court 
agreed  with  this  utterance,  although  recognising  that 
the  weight  of  opinion,  together  with  the  United  States 
court,  was  against  it.  It  declared  that  it  believed  the 
right  to  will  property  exists  inherently,  referring  to  the 
Declaration  of  Independence  which  in  turn  is  copied 
substantially  by  every  State  Constitution.  ''Inherent 
rights"  and  ''pursuit  of  happiness",  it  said,  include  the 
right  to  devise  for  children  or  dependents.^  In  1909,  in 
another  case,  the  inheritance  tax  law  was  again  held 
constitutional,  Mr.  Justice  Winslow  using  these  words: 

"The  right  to  receive  property  by  inheritance  or  will  is 
an  inherent  right,  subject  to  reasonable  regulation  and  taxa- 
tion, but  not  abrogation  by  the  legislature."  ^ 

The  court  thus  took  the  position  of  Mr.  Justice  Mar- 
shall in  the  earlier  case,  Black  v.  The  State;  but  the 
Cyclopcedia  of  Law  and  Procedure  quotes  the  United 
States  Supreme  Court  and  fourteen  jurisdictions  against 
Wisconsin.^ 


420    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

The  importance  of  the  subject  justifies  these  long 
quotations  showing  the  dominant  view  and  an  isolated 
dissenting  view  of  a  court  which  nevertheless  upheld 
the  constitutionality  of  one  of  the  best  inheritance  tax 
laws  in  the  United  States. 

As  a  matter  of  fact,  laws  and  customs  have  regulated 
inheritance  in  divers  ways,  and  there  is  no  uniformity. 
What  seems  natural  is,  in  a  large  degree,  the  result  of 
laws  and  customs.  One  may  say  a  certain  thing  is 
''natural"  with  respect  to  inheritance.  But  what  one 
says  is  natural  is  that  to  which  one  has  become  accus- 
tomed. In  Virginia  in  the  eighteenth  century  the  oldest 
son  has  had  what  was  looked  upon  as  a  ''natural  right" 
to  a  double  share,  and  it  seemed  like  a  violation  of  that 
natural  right  that  the  children  should  inherit  equally. 
As  a  matter  of  fact,  the  power  to  make  a  will  and  testa- 
ment is  one  which  has  not  been  generally  recognised, 
taking  the  world's  history  as  a  whole,  but  the  right  to 
make  a  testament,  or  the  claim  to  such  a  right,  would 
have  seemed  to  the  majority  of  human  beings  a  very 
great  presumption.  Sir  Henry  Sumner  Maine  says, 
"The  power  of  free  testamentary  disposition  implies 
the  greatest  latitude  ever  given  in  the  history  of  the 
world  to  the  volition  or  caprice  of  the  individual."  ^ 
Then  we  have  along  the  same  line  a  legal  maxim  in  the 
old  Teutonic  law  which  says,  "God,  not  man,  makes 
heirs." 

Professor  von  Scheel,  in  his  article  on  the  law  of  in- 
heritance,^'' mentions  four  different  points  of  view, 
according  to  which  property  may  be  distributed  as  it 
passes  from  generation  to  generation.    First,  it  may  be 


DEVELOPMENT  OF  PRIVATE  PROPERTY  421 

distributed  in  accordance  with  blood  relationship,  with 
more  or  less  consideration  for  the  widow;  this  is  the 
dominant  idea.  The  German  law  places  the  widow  on 
about  the  same  footing  as  the  nearest  relative.  In 
France  the  widow  is  not  so  favoured.  In  the  United 
States  she  is  more  favoured  than  a  blood  relative, 
where  the  general  rule  is  that  she  shall  receive  one- 
third,  absolutely,  of  personalty,  and  life  interest  in  one- 
third  of  realty;  that  is  to  say,  she  receives  more  than 
each  child  if  there  are  more  than  two  children;  and  it  is 
to  be  noted  further  that  she  cannot  be  disinherited.^^ 
This  blood  relationship  is  the  principle  generally  fol- 
lowed. It  was  the  principle  of  the  Roman  law  and  it 
has  passed  over  to  us.  It  is  easy  of  application  and, 
as  Von  Scheel  says,  it  rarely  fails.  It  is  to  be  noticed  in 
this  connection  that  relationship  may  be  traced  dif- 
ferently. There  are  two  main  ways  of  tracing  relation- 
ship,— one  is  according  to  lines  ^-  and  another  is  accord- 
ing to  degree  of  relationship.^^  If  we  take  certain  lines, 
favouring  each  line  equally  at  the  start,  and  let  the  prop- 
erty keep  within  that  line,  we  have  the  system  which  is 
followed  in  Austria,  the  so-called  parentelic  system. 
Thus  we  have  the  first  point  of  view  according  to  which 
property  can  be  distributed,  as  follows: 
I.  Blood  relationship. 

1.  According  to  lines. 

2.  According  to  degree  of  relationship. 

II.  The  second  point  of  view  is  according  to  the 
social  connections  of  the  heirs  with  the  deceased;  that 
is,  the  social  bond  or  ties  binding  the  heirs  to  the  de- 
ceased.   Here  the  natural  heirs  are  first  of  all  the  wife 


422     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  next  the  children.  The  distant  relatives  would  not 
inherit,  unless  they  have  lived  with  the  deceased  or 
have  had  some  kind  of  an  economic  connection  with 
him,  as  they  have  no  real  social  tie  otherwise;  but  the 
children  have  such  a  tie,  and  so  does  the  wife.  When 
we  have  this  system,  there  is  no  ''laughing  heir  ",  as  he  is 
called ;  der  lachende  Erhe  being  the  German  term  for  the 
distant  relative  who  laughs  when  he  gets  the  inheritance. 
Nowadays  the  social  connection  resting  upon  the  basis 
of  blood  is  narrowly  limited.  As  a  rule  it  does  not  carry 
the  relationship  very  far.  Professor  von  Scheel  says  it 
does  not  go  beyond  parents  and  grandparents  and  chil- 
dren of  brothers  and  sisters;  for  he  does  not  admit  that 
anyone  more  distantly  related  than  first  cousins  can 
inherit  if  we  have  inheritance  according  to  social  con- 
nection with  the  deceased.  Provision  can  be  made  by 
will  for  more  distant  relatives  when  there  is  a  real 
ground  therefor. 

While  it  is  difficult  to  apply  this  point  of  view,  Pro- 
fessor von  Scheel  regards  it  as  superior  to  the  first. 

III.  The  third  point  of  view  is  inheritance  in  accord- 
ance with  services  or  participation  of  some  sort  in  the 
creation  of  wealth.  Take  the  case  of  the  wife:  It  has 
been  argued  that  she  took  part  in  the  creation  of  the 
wealth  if  the  deceased  was  led  to  acquire  it  for  her  even 
without  direct  economic  contribution  on  her  part  be- 
cause, it  is  urged,  she  was  present  in  the  thought  of  the 
one  who  created  the  wealth  and  thus  she  participated 
in  it.  We  have,  on  the  other  hand,  a  more  obvious  par- 
ticipation when  we  have  a  direct  economic  participation 
in  the  wealth-creation  as  when,  for  instance,  the  wife  of 


DEVELOPMENT  OF  PRIVATE  PROPERTY  423 

a  grocer  helps  to  wait  on  the  customers.  If  it  is  not  the 
wife  it  is  one  of  the  nearest  relatives,  as  a  rule,  who  in 
this  way  shares  in  the  wealth-production  and  who  is  one 
of  the  chief  heirs  if  the  property  is  divided  in  accordance 
with  participation  in  its  creation. 

We  have  to  consider  in  this  case  the  claims  of  political 
units,  of  the  state  and  of  local  political  units.  The  so- 
ciety in  which  we  live  participates  in  the  creation  of 
wealth,  for  unless  we  have  such  society,  there  would  be 
no  considerable  creation  of  wealth. 

Under  this  head  there  is  participation  through  affec- 
tion and  regard.  For  example,  let  us  ask  the  question, 
Which  stands  nearer  to  us,  the  town  in  which  we  have 
grown  up  and  in  which  we  have  many  friends,  or  a  third 
cousin  whom  we  have  never  seen?  Most  people  would 
feel  that  the  town  stood  much  nearer  to  them  than  a 
relative  whom  they  never  saw,  who  never  saw  them  and 
who  has  no  regard  for  them  whatever,  and  would  not  do 
so  much  for  them  as  for  some  one  in  the  town  with  whom 
they  had  no  ties  of  blood.  Most  people  would  much 
rather,  in  the  case  of  absence  of  will,  that  their  property 
should  go  to  the  town  than  that  it  should  go  to  a  third 
cousin.  So  if  we  take  the  standpoint  of  the  wishes  of  the 
deceased,  we  have  no  right  to  think  that  we  are  carrying 
out  his  wishes  in  giving  his  property  to  a  distant  cousin 
who  cared  nothing  for  him,  rather  than  to  the  town  or 
city  in  which  he  lived. 

IV.  According  to  the  fom'th  point  of  view,  distribu- 
tion will  be  made  among  those  who  will  make  the  best 
use  of  the  property;  that  is,  the  best  use  for  society,  and 
this  means  chiefly  those  who  will  employ  the  property 


424    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

most  productively.  This  was  the  scheme  of  Bazard, 
one  of  the  followers  of  the  French  socialist,  Saint-Simon. 
He  proposed  that  property  should  be  taken  by  the  state 
from  the  descendants,  and  given  to  those  who  would 
make  the  best  use  of  it.  He  held  that  the  ownership  of 
property  was  like  a  political  office;  as  the  idea  of  society 
is  to  convey  office  to  the  one  who  will  use  it  as  a  trust  for 
society,  so  the  state  should  take  property  as  it  passes 
from  generation  to  generation  and  put  it  into  the  hands 
of  those  who  will  make  the  best  use  of  it.  This  plan 
would  give  the  land  to  those  who  had  special  capacities 
for  cultivating  land,  etc.,  but  the  Saint-Simonians  them- 
selves modified  the  scheme." 

There  are  various  aims  which  we  may  have  in  view  to 
be  accomplished  in  the  distribution  of  wealth.  Pro- 
fessor von  Scheel  has  another  article  on  inheritance  in 
Hirth's  Annalen  des  Deutschen  Reiches,  in  the  issue  for 
1877,^^  called  the  ''Taxation  of  Inheritance."  He  men- 
tions in  this  article  three  aims  to  be  sought  by  inherit- 
ance laws  in  general,  as  follows: 

"In  general,"  he  says,  "the  property  which  becomes 
free  through  death  should  be  distributed  anew  in  a  man- 
ner which  corresponds  with  the  views,  the  conditions, 
the  needs  of  the  culture-period,  which,  in  a  given  nation, 
has  been  reached  at  the  given  time.  The  law  must  be 
such  as  to  bring  about  the  distribution  of  the  property 
which  corresponds  with  that  stage  of  development 
which  has  been  reached,  and  each  stage  of  development 
carries  with  it  certain  views,  and  conditions,  and  needs. 
It  has  to  correspond  with  the  needs  of  a  given  degree  of 
culture." ^^    The  old  meaning  of  inheritance  laws  has 


DEVELOPMENT  OF  PRIVATE  PROPERTY  425 

disappeared.  Times  have  changed  and  old  laws  mean 
something  different  on  account  of  changes  in  circum- 
stances and  needs.  The  laws  must  be  such  as  to  assist 
us  in  meeting  the  needs  of  the  present.  The  three  aims 
to  be  sought  in  these  laws,  as  stated  by  him,  are  as  fol- 
lows: 

1.  Provision  for  the  family,  for  wife  and  children. 

2.  The  preservation  of  small  properties;  laws  which 
will  prevent  the  destruction  of  small  properties  through 
excessive  subdivision.  Small  properties  may  disappear, 
because  too  much  subdivided,  or  they  may  come  to 
have  a  different  character. 

3.  Economic  justice.  There  should  be  no  inheritance 
without  an  economic  motive. 

We  have  considered  inheritance  chiefly  as  determined 
by  law,  and  have  mentioned  only  incidentally  inherit- 
ance as  determined  by  last  will  and  testament.  That 
will  presently  receive  further  consideration. 

The  present  author  holds  that  four  aims  are  to  be 
kept  before  us  in  the  distribution  of  wealth  through  the 
laws  of  inheritance: 

I.  The  continuation  of  the  regime  of  private  prop- 
erty as  dominant  in  the  social  order. 
II.  The  wishes  of  the  individual. 

III.  The  well-being  of  the  family. 

IV.  The  well-being  of  society. 

In  regard  to  the  first  object,  little  needs  to  be  said. 
The  question  is  simply  this, — Do  we  decide  on  the  whole 
in  favour  of  socialism,  or  in  favour  of  the  present  social 
order?  If  the  latter,  then  we  want  a  kind  of  regulation 
of  inheritance  which  will  preserve  private  property. 


426     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

We  wish  to  bring  it  about  that  when  an  owner  of  prop- 
erty dies,  some  private  individual  shall  succeed  him 
and  carry  on  his  economic  activity  in  the  use  of  his  prop- 
erty. If  we  want  socialism,  there  is  probably  no  easier 
way  to  get  it  than  to  change  the  order  of  the  inheritance 
of  property,  because  through  changes  in  inheritance  of 
property  we  could  bring  about  collectivity  of  property, 
making  society  the  owner  of  it  all  in  a  comparatively 
short  period.  But  if  we  say  that  we  want  to  continue 
the  present  regime  we  must  interpret  exactly  what  we 
mean  by  the  present  regime.  When  we  say  that  we  de- 
sire the  present  regime  as  opposed  to  socialism,  we  do 
not  mean  that  we  wish  to  keep  things  exactly  as  they 
are,  but  simply  that  private  property  should,  on  the 
whole,  be  dominant.  The  writer,  for  example,  is  quite 
willing  to  see  an  expansion  of  public  property  along 
certain  lines,  but  he  is  not  wilhng  to  give  adhesion  to 
anything  which  would  make  collective  public  property 
in  capital  and  land  dominant. 

In  the  second  place,  we  should  consider  the  wishes  of 
the  individual,  that  is,  his  wishes  before  his  death.  We 
must  regard  his  wishes  as  subordinate,  however,  be- 
cause the  earth  belongs  to  the  living  and  not  to  the 
dead.  Anything  that  looks  like  a  claim  of  the  dead  is  in 
reality  the  claim  of  some  living  person.  It  may  add  to  a 
person's  happiness  to  look  forward  to  what  shall  be  after 
he  is  dead  and  gone.  We  decide,  therefore,  that  so  far 
as  no  one  is  injured  thereby,  let  the  individual  make 
a  will  and  let  the  will  prevail.  That  gives  us  a  guiding 
point.  We  do  not  allow  the  wishes  of  the  dead  to  pre- 
vail in  other  respects,  why  should  they  in  respect  to 


DEVELOPMENT  OF  PRIVATE  PROPERTY  427 

property?  And  we  must  also  say  this,  that  to  a  cer- 
tain extent  the  power  of  making  a  will  injures  the  in- 
dividual himself.  It  gathers  flatterers  and  sycophants 
about  him.  This  is  something  which  is  a  matter  of 
familiar  knowledge.  It  is  admirably  described  by 
Plato,  by  Juvenal  and  the  Roman  satirists  and  by 
countless  others  since  their  day. 

But  we  pass  on  to  the  third  point  of  view — the  welfare 
of  the  family.  F.  H.  Geffcken  says  that  the  law  of  in- 
heritance "  in  its  foundation  and  purpose  is  the  material 
continuity  and  safety  of  the  family."  ^^  The  German 
philosopher,  Trendelenburg,  in  his  work  on  Natural 
Law,  says  that  the  right  of  inheritance  exists  first  of  all 
for  the  preservation  of  the  family,  and  that  the  wishes 
and  purposes  of  the  decedent  come  second  in  order  of 
importance.  This  view  limits  very  materially  the  right 
of  making  a  will.  ^^  The  family  as  a  social  institution  has 
in  recent  years  been  neglected,  although  more  attention 
has  been  given  to  this  subject  within  the  past  fifteen  or 
twenty  years  than  previously  in  the  most  modern  times. 
But  we  have  to  ask  who  it  is  that  constitutes  the  family. 
This  question  has  already  been  answered.  In  case  of 
intestacy,  the  present  legal  view  would  in  some  places 
include  nearly  all  relatives  who  could  trace  any  blood 
ties.  But  this  is  a  survival  of  an  older  time.  Miaskow- 
ski,^^  says  that  inheritance  in  the  case  of  intestacy  should 
cease  with  that  degree  of  relationship  with  which,  as  a 
rule,  the  feeling  or  consciousness  of  relationship  ceases.^" 
That  would  give  us  a  difi'erent  degree  according  to  the 
country  and  the  age  which  we  are  considering.  At  one 
time  the  feeling  or  consciousness  of  relationship  goes 


428    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

further  than  at  another  time,  and  further  in  one  part 
of  the  world  than  in  another.  It  goes  further  in  Vir- 
ginia than  in  Wisconsin,  for  example,  so  that  it  would 
perhaps  be  the  same  thing  to  cut  off  inheritance  with 
the  third  cousin  in  Virginia  as  with  the  second  cousin 
in  Wisconsin,  roughly  and  generally  speaking. 

We  have  seen  already  how  we  treat  the  family  in  case 
of  intestacy.  But  in  the  case  of  a  will  and  testament  we, 
in  America,  do  not  give  any  recognition  to  the  family 
beyond  the  claims  of  the  wife,  that  is,  recognition  in 
opposition  to  the  will  and  testament.  The  wife  is  the 
only  one  who  in  the  United  States  has  a  share  even 
against  the  will  and  testament.  In  an  article  entitled 
"About  Wills  and  Testaments,"  Judge  A.  E.  Thomas,^! 
says,  "A  general  statute  providing  that,  except  for  spe- 
cial reasons,  each  child  shall  receive  share  and  share 
alike,  would  not  only  appear  to  be  the  most  equitable 
in  by  far  the  majority  of  instances,  but  would  promote 
family  concord  and  happiness  and  would  diminish  fam- 
ily feuds  and  htigations  to  a  remarkable  extent."  Judge 
Thomas  would  provide  for  the  widow  first;  in  case  of  no 
descendants  he  would  allow  greater  latitude  than  other- 
wise. 

Now  in  other  countries  outside  of  England  and  the 
United  States  it  is  a  rule  that  children  cannot  be  disin- 
herited. This  was  certainly  the  case  with  the  Roman 
law  in  its  highest  form  and  development.  It  gives  a 
certain  share  to  each  child,  what  is  called  a  legitima  por- 
tio.^^  And  in  Germany  we  find  a  similar  arrangement 
under  the  designation  of  Pflichtteil,  or  duty  part.  This 
is  especially  instructive  to  Americans  and  Enghshmen 


DEVELOPMENT  OF  PRIVATE  PROPERTY  429 

who  have  not  adequately  preserved  the  idea  of  the  fam- 
ily in  the  laws  governing  the  inheritance  of  property. 
This  matter  is  now  regulated  for  the  whole  of  Germany 
by  the  new  civil  code  {Das  Burgerliche  Gesetzbuch). 

Briefly  outlined  we  find  the  following  provisions  in 
Germany  in  regard  to  the  '^duty  parts  ".  Anyone  may 
dispose  of  his  property  by  will  and  may  leave  it  to  others 
than  those  who  have  claims  to  "duty"  shares,  but  in 
that  case  those  entitled  to  portions  may  demand  their 
portions  from  the  person  or  persons  to  whom  the  prop- 
erty has  been  left,  and  the  duty  part  is  equal  to  one-half 
the  part  that  would  be  received  in  case  no  will  had  been 
made.  If  in  absence  of  a  will,  for  example,  a  child  is  en- 
titled to  one-third,  his  duty  part  is  one-half  of  one- 
third,  that  is  to  say,  one-sixth.  Those  who  are  entitled 
to  shares  are  (l)  husband  and  wife;  (2)  descendants;  (3) 
parents.  Husband  and  wife  and  children  have  always 
claims.  Descendants  more  remote  than  children  (grand- 
children, great  grand-children,  etc.)  and  parents  have 
duty  parts  when  they  are  not  excluded  by  nearer  rel- 
atives— for  example,  the  grandchildren  of  living  parents 
would  be  excluded.  Those  who  are  entitled  to  duty 
parts  can  be  excluded  by  will  and  testament  only  for 
certain  causes  which  must  be  explicitly  stated  in  that 
will  and  testament.  Descendants  and  parents  may  be 
excluded  from  inheritance  if  they  have  made  an  attempt 
on  the  life  of  the  decedent,  or  of  his  wife  (or  husband  as 
the  case  may  be)  or  his  other  descendants:  when  they 
have  been  guilty  of  a  criminal  offence  against  the  de- 
cedent or  the  husband  or  wife  of  the  decedent;  if  they 
have  neglected  their  duty  to  support  the  decedent  in 


430    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

need;  if  childi'en  have  been  guilty  of  grossly  immoral 
and  disgraceful  conduct.  A  husband  or  wife  may  be 
excluded  if  guilty  of  conduct  which  would  be  ground 
for  divorce.  But  the  ground  for  disinheritance  must 
be  expressly  stated  in  the  will  and  testament  and  the 
statement  must  be  true.^^ 

It  is  difficult  to  say  how  much  shall  be  left  to  each 
child  when  we  depart  from  equal  distribution.  It  must 
be  remembered,  however,  that  a  father  may  well  have 
excellent  grounds  for  preferring  one  child,  as,  for  ex- 
ample, preferring  an  invalid  child  when  the  others  are 
strong  and  vigorous;  or  an  unmarried  daughter  when 
the  sons  are  already  started  in  life.  But  it  may  be 
provided,  that  if  one  child  is  preferred,  the  grounds  for 
preferring  this  child  should  be  expressly  stated;  especi- 
ally should  this  be  so  if  one  is  left  without  any  share, 
as  in  the  case  of  small  property.  We  cannot  go  into  all 
the  details  of  this  now.  It  is  suggested  as  one  way  to 
strengthen  the  idea  of  the  family  and  as  promotive  of 
family  feehng,  that  it  would  be  desirable  to  encourage 
small  bequests  to  servants  who  have  served  long  in  the 
family,  making  them  free  from  an  inheritance  tax.  The 
tendency  would  be  to  help  to  bind  together  the  house- 
hold. 

Another  thought  is  this:  To  make  duty  go  as  far  as 
rights.  Perhaps  this  can  be  carried  out  so  as  to  extend 
the  duty  of  support.  Why  should  anyone  have  a  claim 
in  the  absence  of  a  will  if  he  is  under  no  obhgation?  We 
do  not  extend  obligations  sufficiently;  in  some  places  a 
father  has  no  legal  claim  upon  a  son  even  if  the  son  has  a 
large  property,  and  yet  the  son  would  think  himself  un- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  431 

fairly  treated  if  he  did  not  inherit  his  father's  property. 
But  within  these  various  limitations  suggested  by  the  in- 
terests of  the  family  and  the  well-being  of  society,  the 
right  of  a  last  will  and  testament  is  to  be  preserved. 

We  take  up  next  the  well-being  of  society.  What  does 
that  demand?  We  have  already  seen  that  the  well- 
being  of  society  demands  that  the  family  be  considered ; 
the  family  is  the  social  unit.  So  in  providing  for  the 
family,  for  the  unity  and  security  of  the  family,  we  are 
promoting  the  interests  of  society.  In  this  connection 
also  we  have  to  consider  the  distribution  of  property  in 
the  interests  of  production,  handing  property  over  to 
the  wise  and  provident,  so  far  as  may  be.  In  case  a 
father  were  obliged  in  his  will  to  give  grounds  for  dis- 
crimination among  the  various  members  of  his  family, 
we  might  have  as  a  ground  for  allowing  certain  inequali- 
ties, the  prudence  and  wisdom  of  some  above  that  of 
others.  The  question  then  would  be  whether  he  had 
done  all  he  could  to  educate  each  one  of  his  children. 
We  have  to  consider  also  the  holdings  of  land,  whether 
they  are  too  small  or  not.  If  they  are  too  small,  they 
will  injure  production.  It  might  be  said  here  that  we 
desire  the  wide-spread  diffusion  of  competence  as  better 
calculated  to  bring  about  the  well-being  of  society  than 
colossal  fortunes. 

Thus  under  the  head  of  the  well-being  of  society  we 
notice  these  reasons  for  allowing  a  certain  latitude  in 
the  testamentary  disposition  of  property: 

1.  The  wise  use  of  property,  which  use  it  is  hoped 
may  be  thereby  promoted.  The  prevention  of  the  undue 
cutting  up  of  individual  properties. 


432    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

2.  The  incentive  thereby  secured  for  the  accumula- 
tion of  property. 

3.  The  provision  for  the  needy  and  meritorious  and 
for  pubHc  needs. 

Another  thing  remains  to  be  considered  in  connection 
with  the  well-being  of  society,  and  that  is  that  society 
now,  to  some  extent,  takes  the  place  of  the  family  in 
earher  days.  Obligations  which  rested  upon  the  family  in 
earlier  days  when  it  included  the  most  distant  relatives, 
now  rest  upon  society,  and  the  claims  which  the  indi- 
vidual has  upon  society  give  society  a  counter  claim 
which  justifies  the  taxation  of  inheritance  as  a  correla- 
tive right.  The  duty  of  support,  which  once  rested 
upon  distant  relatives,  has  now  passed  over  to  society 
and  is  incorporated  in  the  state;  and  as  society  has  taken 
some  of  the  obligations,  it  is  only  proper  for  society  to 
claim  some  of  the  rights  which  formerly  belonged  to  the' 
family. 

The  rights  of  society  are  also  promoted  and  protected 
by  the  taxation  of  inheritance.  There  are  various  views 
that  we  may  take  concerning  this.  We  may  look  upon 
the  state  as  a  co-heir  and  claim  that  the  state  has  par- 
ticipated in  production. 

According  to  Dr.  Max  West,  eight  different  views 
have  been  advanced  to  justify  the  taxation  of  inherit- 
ance.^^ As  they  are  theories  to  justify  inheritance  taxa- 
tion in  the  interest  of  society,  they  could  all  be  placed 
under  our  fourth  head.  We  will  now  present,  with  com- 
ments. Dr.  West's  eight  theories : 

I.  The  limitation  of  inheritance  and  the  extension  of 
escheat.    This  was  Jeremy  Bentham's  view. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  433 

II.  The  effect  on  the  diffusion  of  wealth. 

III.  Taxation  a  return  for  government  services  in 
general  (co-heir). 

IV.  A  return  for  special  government  services  con- 
nected with  inheritance  and  bequest.  The  government 
does  render  special  service  at  such  a  time.  The  heir  and 
legatees  may  be  far  away  and  the  property  left  without 
a  guardian ;  the  state  steps  in  and  protects  the  property 
at  such  a  time.  It  renders  peculiar  service  of  pecuniary 
value. 

V.  Defraying  the  costs  of  probate  court. 
VI.  Payment  of  back  taxes.  This  is  a  view  which 
can  be  advanced  especially  in  regard  to  large  estates 
which  very  frequently  do  not  pay  the  taxes  to  which  the 
state  has  a  rightful  claim.  Very  large  properties  are 
undertaxed  as  a  rule,  and  inheritance  taxation  can  be 
looked  upon  as  payment,  to  a  certain  extent,  of  back 
taxes.  In  Maryland,  for  example,  if  a  rich  man  dies, 
it  frequently  happens  that  the  estate  has  been  under- 
taxed,  and  the  county  officers  send  in  a  claim  for  back 
taxes  for  three  or  four  years.  Then  the  executors  or 
administrators  object  to  the  claim  and  say  that  they 
will  fight  the  case  in  the  courts;  but  evidently  both 
parties  are  afraid  to  bring  the  case  into  the  courts  and 
so  it  happens  that  the  State,  through  the  county  officers, 
lays  claim  to  perhaps  $100,000.  The  executors  and 
administrators  will  perhaps  offer  to  pay  $10,000,  which 
is  not  accepted;  then  both  parties  claim  that  they  will 
bring  it  into  the  courts,  which  they  do  not  do  and  there 
always  follows  some  kind  of  compromise;  rather  a  pe- 
culiar arrangement.     Under  the  name  of  back  taxes, 


434    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

Maryland  has  long  collected  on  large  estates  what 
really  amounts  to  a  sort  of  inheritance  tax. 

An  inheritance  tax,  even  with  that  name,  may  some- 
times be  regarded  as  a  ''back  tax",  and  cases  have  oc- 
curred in  which  it  was  even  a  very  inadequate  back 
tax.  Newspapers  have  given  us  an  account  of  an 
estate  valued  at  $70,000,000  the  owner  of  which,  it  was 
alleged,  paid  taxes  on  only  $500,000.  An  inheritance 
tax  of  1  per  cent,  on  the  value  was  less  than  the  usual 
yearly  tax  rate  on  many  small  estates.  While  it  should, 
however,  always  be  remembered  in  the  case  of  a  great 
estate,  that  much  of  the  property  consists  of  shares  in 
private  corporations  which  may  be  heavily  taxed,  an 
inheritance  tax  of  one  per  cent,  is  a  very  small  burden. 
For  even  with  all  due  allowances  for  taxes  paid  that 
do  not  appear  under  the  owner's  name,  the  very  rich 
appear  frequently  in  America  and  elsewhere  to  pay 
less  than  their  due  proportion  of  taxes.  But  after  all, 
this  is  a  weak  theory  of  inheritance  taxation,  for  it  de- 
liberately assumes  past  injustice  to  be  atoned  for  by  a 
sort  of  taxation  which  must  in  the  main  be  governed  by 
different  aims  and  never  could  be  in  proportion  to  past 
injustice.  The  man  who  conscientiously  paid  full  taxes 
would  have  an  estate  to  be  taxed  by  the  same  rules  which 
would  apply  to  the  conscienceless  tax  dodger. 

VII.  A  property  tax  paid  in  a  lump  sum  once  in  a  life- 
time. Strong  grounds  might  be  advanced  for  taking  this 
position,  for  a  special  inheritance  tax  in  lieu  of  the  tax 
on  miscellaneous  personal  property  which  should  then 
be  exempted  from  other  taxation.  This  is  in  part  the 
view  which  prevailed  in  New  York  State,  when  a  one  per 


DEVELOPMENT  OF  PRIVATE  PROPERTY  435 

cent,  tax  on  inherited  personal  property  was  imposed, 
although  the  tax  on  miscellaneous  forms  of  personal 
property  in  New  York  State  was  not  aboHshed.  But  if 
we  have  an  exemption  of  miscellaneous  forms  of  personal 
property  and  in  Ueu  thereof  put  a  special  tax  on  estates, 
in  so  far  as  they  consist  of  personal  property;  this  should 
be  in  addition  to  any  general  inheritance  tax.  Suppose 
we  had  a  general  tax  of  5  per  cent,  whether  real  estate 
or  personal,  and  suppose  we  had  exempted  personal 
property  from  taxation  and  in  Heu  thereof  we  put  a  tax 
upon  inherited  personal  property,  because  we  can  best 
reach  it  when  it  comes  before  the  probate  court,  we 
would  then  have  to  put  a  special  inheritance  tax  on  per- 
sonal property  in  addition  to  the  general  inheritance 
taxes,  so  as  to  equalise  the  total  taxes  in  both  kinds  of 
property. 

VIII.  A  tax  on  a  particular  form  of  accidental  in- 
come without  any  special  counter-service. 

We  are  unable  to  adopt  this  view  without  many 
qualifications.  It  is  not  a  correct  view  in  cases  in  which 
the  wife  and  children  work  with  the  husband  and  father. 
The  property  they  inherit  is  then  a  joint  product  to 
which  all  have  contributed.  If  the  head  of  the  family 
has  been  by  far  the  largest  contributor,  there  may  be  a 
large  surplus  over  and  above  that  part  of  the  inherit- 
ance which  is  to  be  imputed  to  the  efforts  of  the  sur- 
viving members.  This  surplus  might  be  an  income 
without  any  special  service  on  the  part  of  the  recipients, 
but  even  then  could  hardly  be  regarded  as  an  accidental 
income. 

When  it  comes  to  taxation  of  an  inheritance  in  such 


436    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

cases  as  this,  the  size  of  the  property  inherited  has  to  be 
considered.  Frequently  the  family  group  will  not  be 
in  so  strong  a  financial  position  as  heretofore,  and  will  be 
less  able  to  pay  taxes.  Where  the  wealth  is  very  great, 
the  probability  of  a  commensurate  service  on  the  part 
of  the  heirs  becomes  smaller,  and  the  propriety  of  tax- 
ation increases.  When,  however,  we  come  to  heirs  out- 
side the  immediate  family,  and  especially  to  those  who 
are  remote,  the  ''laughing  heirs"  {die  lachenden  Erben), 
this  view  has  special  force. 

Each  of  these  theories  has  elements  of  truth,  to  be 
considered  in  any  exhaustive  discussion;  and  we  cannot 
draw  up  inheritance  laws  for  all  times  and  places,  but 
we  must  provide  as  best  we  can  for  particular  times 
and  places.  There  are  some  general  principles  which 
we  may  notice. 

First,  the  exemption  of  a  minimum.  The  principal 
of  this  exemption  is  a  sum  which  would  yield,  when 
safely  invested,  an  income  which  would  reasonably  be 
exempted  from  an  income  tax.  We  do  not  go  far  enough 
in  this  exemption.  There  seems  to  be  a  good  deal  of 
misapprehension  upon  the  part  of  the  com'ts  concerning 
this  minimum.  In  Ohio  an  exemption  of  a  reasonable 
minimum  was  made  one  of  the  grounds  for  declaring 
the  law  unconstitutional.^^  We  must  consider  the 
loss  to  a  family  in  the  case  of  the  death  of  the  head  of 
the  family.  If  the  property  is  small,  it  has  probably 
depended  mainly  on  his  earnings.  The  family  is  less 
able  to  pay  taxes  than  before.  This  deserves  some  con- 
sideration. And  we  must  take  into  account  the  number 
of  children,  etc.    In  Ohio  it  was  thought  that  $20,000 


DEVELOPMENT  OF  PRIVATE  PROPERTY  437 

was  a  very  large  sum  and  involved  a  real  inequality  in 
taxation,  and  a  discrimination  against  the  rich.  This 
view  cannot  be  maintained.  We  have  a  clear  principle 
to  guide  us  in  the  exemption  of  a  minimum,  and  that 
has  already  been  mentioned.  Everywhere  a  certain 
sum  is  exempted  from  income  taxation,  and  the  ex- 
empted inheritance  should  yield  that  income.  Nobody 
would  claim  that  in  the  United  States  it  would  be  al- 
together unreasonable  to  exempt  $1000  from  an  income 
tax;  consequently  we  may  with  equal  propriety  exempt 
from  an  inheritance  tax  a  sum  which  will  yield  $1,000 
or  $20,000;  in  this  case,  therefore,  the  exemption  is  not 
high  at  all,  but  moderate,  and  it  involves  no  discrimi- 
nation against  the  rich.  It  is  altogether  different  from 
an  exemption  of  $4,000  from  an  income  tax.  That 
would  more  nearly  correspond  to  an  exemption  of 
$80,000  from  an  inheritance  tax,  and  could  with  pro- 
priety be  viewed  as  a  discrimination  against  the 
rich. 

We  must,  as  has  been  said,  consider  the  loss  of  the 
family  in  the  case  of  death,  and  we  must  take  into  ac- 
count also  the  niunber  of  children.  We  might  have  a 
minimum  of  exemption  from  an  income  tax  of  $600  a 
year  for  the  widow,  and  $200  a  year  for  each  child  up 
to  the  age  of  twenty-one  years,  or  to  whatever  age  is 
adopted.  Let  us  suppose  there  is  a  child  five  years  old. 
A  certain  sum  which  would  be  the  equivalent  of  $200  a 
year  for  that  child  up  to  the  age  of  twenty-one  might 
be  exempted  from  inheritance  taxation.  But  the  mini- 
mum should  be  exempted,  however  large  the  estate. 
In  this  way  we  treat  everybody  equally.    Even  in  the 


438     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

case  of  an  estate  of  $1,000,000  a  sum  of  from  $12,000 
to  $20,000  should  be  exempt  from  taxation. 

The  second  general  principle  is  to  increase  the  tax 
according  to  two  principles: 

1.  According  to  degree  of  relationship,  making  it 
higher  as  relationship  becomes  more  distant. 

2.  According  to  the  amount  inherited. 

This  would  be  following  the  actual  tendency  through- 
out the  world. 

Then  there  is  the  further  question, — Shall  we  treat 
the  estate  as  a  whole,  or  consider  the  share  of  each  one 
in  determining  the  rate  of  tax?  In  Illinois  and  Wiscon- 
sin, the  share  of  each  one  is  considered.  This  is  the 
case  also  in  some  places  in  Switzerland  and  in  South 
Austraha.-^ 

Shall  we  make  a  distinction  between  testate  and  in- 
testate property,  as  Mill  suggests?  There  has  been  no 
movement  for  such  a  radical  distinction  as  he  makes; 
and  it  is  difficult  to  see  why  we  should  make  any  such 
distinction.  Mill  adopts  a  false  principle,  ^^  when  he 
makes  a  radical  distinction  between  children  turn  on 
testacy  or  intestacy.  If  a  father  wills  to  a  child  any 
amount,  however  great,  it  would  seem  that  the  child 
might  take  it;  but  if  the  father  does  not  make  any  will, 
then  the  child  inherits  nothing,  according  to  Mill.  This 
is  unsound,  and  in  our  actual  laws  no  tendency  to  make 
that  distinction  can  be  discerned. 

It  has  already  been  mentioned  that  Bazard,  a  follower 
of  Saint-Simon,  wished  to  introduce  inheritance  accord- 
ing to  economic  merit  instead  of  according  to  relation- 
ship, the  property  falling  into  the  hands  of  the  state  and 


DEVELOPMENT  OF  PRIVATE  PROPERTY  439 

being  then  distributed  according  to  merit  and  being 
placed  in  the  hands  of  those  who  would  use  the  property 
best.  He  says  that  in  other  important  social  relations 
inheritance  has  been  abolished,  for  example,  offices  and 
occupations  are  no  longer  transmitted  by  inheritance. 
Why  should  property  be  so  transmitted?  No  one  has 
taken  up  this  idea  seriously.  ^^  The  Saint-Simonians 
themselves  did  not  accept  this  proposal  without  impor- 
tant modifications.  They  advocated  high  progressive 
taxation  and  abolition  of  collateral  inheritance  of  dis- 
tant relatives;  "abolition  in  those  degrees,"  says  von 
Scheel,  "in  which  their  economic  justification  ceases." 

We  have  a  clear  social  aim  in  the  taxation  of  inherit- 
ance, and  it  makes  no  difference  whether  it  is  avowed 
or  not.  Perhaps  no  one  in  favour  of  inheritance  taxa- 
tion would  wish  to  avow  a  social  aim  in  an  argument 
to  be  presented  to  an  American  court;  but  this  aim  must 
be  there  and  the  social  aim  is  generally  an  approxima- 
tion to  equality  of  opportunity. 

One  question  suggests  itself  in  this  connection, — 
whether  the  children  of  the  well-to-do  do  not  enjoy  an 
advantage  over  others,  even  apart  from  inheritance,  an 
advantage  for  which  they  have  rendered  no  service, 
such  as  connections,  manners,  culture,  expensive  train- 
ing, etc.  But  to  cut  them  off  from  any  inheritance  of 
property  is  contrary  to  the  idea  of  the  family  and  op- 
posed to  that  continuity  in  economic  life  which  is  a  con- 
dition of  satisfactory  economic  progress.  Also,  ac- 
quired habits  have  to  be  considered,  and  the  possibilities 
of  the  transmission  of  culture  which  may  work  down- 
ward from  the  richer  to  the  poor.    But  we  may  go  so 


440    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

far  as  to  urge  a  regulation  of  taxation  in  inheritance  in 
behalf  of  the  children  of  the  rich.  The  disadvantage, 
on  the  whole,  of  the  inheritance  of  great  wealth  is  ad- 
mitted by  nearly  every  thoughtful  person.  Those  who 
discuss  the  education  and  cultivation  of  the  young  feel 
very  generally  that  it  is  a  disadvantage  for  most  young 
men  or  women  to  have  a  vast  amount  of  property.  Speak- 
ing of  endowments,  etc.,  a  writer  in  Palgrave's  Diction- 
ary of  Political  Economy, ^^  says  that,  on  the  whole,  the 
present  tendency  is  to  distribute  endowments  by  com- 
petition, making  ability  and  not  poverty  the  test.  This 
tends  to  raise  the  whole  level  of  the  competition  and  so 
to  benefit  the  poor,  because  "the  spur  of  poverty  is  suffi- 
cient to  secure  industry,  and  the  temptations  to  idleness 
which  go  with  wealth  are,  in  the  great  majority  of  cases, 
strong  enough  to  prevent  members  of  the  wealthy  class 
from  competing  successfully."  It  used  often  to  be  the 
rule  in  distributing  university  scholarships  that  poverty 
and  not  merit  should  be  the  basis  of  award.  Now  the 
tendency  is  to  make  ability  and  not  poverty  the  test. 
And  in  most  of  our  institutions  in  these  days  the  man 
who  gets  a  fellowship  or  a  scholarship  may  be  a  million- 
aire, but  "the  temptations  to  idleness  which  go  with 
wealth  are  in  the  great  majority  of  cases  strong  enough 
to  prevent  members  of  the  wealthy  class  from  competing 
successfully."  Thus  although  the  scholarships  are 
really  given  on  the  basis  of  capacity,  yet  they  do  as  a 
fact  go  chiefly  to  the  poor.  This  is  evidence  that  it  is  a 
disadvantage  for  a  young  man  to  have  a  great  deal  of 
money;  and  yet,  on  the  other  hand,  those  who  have 
large  inherited  wealth  and  who  fully  improve  its  oppor- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  441 

tunities,  as  some  do,  have  marked  advantages  which 
may  benefit  society.  On  the  whole,  however,  we  cer- 
tainly can  strongly  urge  the  regulation  of  taxation  of 
inheritance  from  the  standpoint  of  the  wealthy,  not 
merely  from  the  standpoint  of  equality  of  opportunity 
for  the  poor.  The  extremes  of  wealth  cut  off  from 
equality  of  opportunity  the  very  poor  and  the  very  rich. 

Another  thought  is  suggested  by  an  observation  in  the 
Fabian  Essays  that  under  different  property  laws,  with 
perpetual  copyright,  we  might  have  had  a  great  family 
of  Dukes  of  Shakespeare  in  England.  ''If  the  Whig 
landlords  who  are  responsible  for  most  of  the  details  of 
our  glorious  constitution  had  been  also  authors  and  in- 
ventors for  profit,  we  should  probably  have  had  the 
strictest  rights  of  perpetual  property  or  even  of  entail 
in  ideas;  and  there  would  now  have  been  a  Duke  of 
Shakespeare  to  whom  we  should  have  had  to  pay  two 
or  three  poimds  for  the  privilege  of  reading  his  ancestor's 
works,  provided  that  we  returned  the  copy  uninjured 
at  the  end  of  a  fortnight. "^"^ 

Just  a  word  about  the  effects  of  inheritance  laws  on 
national  wealth.  The  older  economists  were  inclined 
to  say  that  such  taxation  was  unthrifty,  that  it  tended 
to  diminish  capital  and  thus  to  the  impoverishment  of 
the  country.  Economists  do  not  urge  that  objection 
at  the  present  time.  Mill  made  a  strong  point  against 
this  view  when  he  said,  If  we  have  a  national  debt  we 
can  at  least  use  the  money  derived  from  taxation  of 
estates  to  pay  off  the  national  debt.  This  is  very  true. 
Thus  the  capital  of  the  country  is  not  at  all  diminished, 
because  those  who  are  paid  use  the  money  as  capital. 


442    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

That  is,  if  a  man  had  £1,000  in  Consols  (and  out  of  the 
proceeds  of  the  EngUsh  death  duties  this  bond  is  paid 
off)  he  would  have  to  use  that  money  so  received  as 
capital;  otherwise  his  estate  would  be  diminished. 
This  is  sufficiently  obvious.  Or  the  proceeds  of  in- 
heritance taxation  could  be  used  for  educational  pur- 
poses, the  improvement  of  roads,  etc.,  which  are  in- 
directly productive.  It  is  also  possible  that  a  wider 
diffusion  of  wealth  would  give  new  hope  and  stimulus 
to  the  community.  It  is  likewise  apt  to  have  a  whole- 
some influence  upon  those  who  would  otherwise  inherit 
large  sums  of  money,  leading  to  waste  along  various 
lines.  Moreover,  if  the  tax  is  not  very  heavy,  it  may 
be  paid  out  of  current  income,  just  as  are  other  taxes. 
The  long  and  short  of  it  is  that  of  itself  taxes  do  not 
directly  diminish  aggregate  wealth;  but  from  one  point 
of  view  they  may  be  looked  upon  as  simply  redistribut- 
ing it.  And  there  is  no  reason  why  an  inheritance  tax 
should  diminish  the  national  wealth.  It  tends  rather  to 
a  distribution  of  the  burden  of  taxation,  a  distribution 
of  wealth,  and  may  often  lead  to  an  accumulation  of 
national  capital,  if  the  law  is  wise  in  its  details.  But 
if  inheritance  taxation  is  heavy  it  may  be  unthrifty 
taxation,  unless  special  care  is  exercised  in  the  use  made 
of  it.  It  is  becoming  now  a  serious  matter.  Special  uses 
for  inheritances  are  to  be  recommended,  so  as  to  prevent 
wealth  diminution.  When,  as  in  some  cases  nowadays, 
we  have  inheritance  taxes  of  15  per  cent.,  manifestly 
they  cannot  be  paid  out  of  current  income;  and  if  the 
proceeds  are  used  for  the  regularly  recurring  expenditure 
of  government,  we  do  incur  the  danger  of  a  diminution 


DEVELOPMENT  OF  PRIVATE  PROPERTY  443 

of  national  wealth.  It  is  now  time  that  our  legislative 
bodies  should  devise  methods  for  the  expenditure  which 
will  improve,  as  it  were,  the  national  plant.  Either  the 
land  should  be  improved,  better  roads  constructed,  the 
material  equipment  enriched,  or  personal  efficiency 
should  be  increased  by  educational  measures  directed  to 
this  end.^^ 


Notes  and  References  to  Chapter  XVII 

1  P.  416.  Blackstone,  Commentaries,  Bk.  II,  Chap.  I,  pp.  10, 
12-13  (Cooley  ed.). 

2  P.  416.  Quoted  from  Smart's  Studies  in  Economics,  pp.  295-6. 

3  P.  417.  170  U.  S.  283  (1897),  p.  288.  The  above  was  reiterated 
and  quoted  with  approval  in  Plummer  v.  Coler,  178  U.  S.  115  (1900), 
p.  133. 

*  P.  418.  Mr.  Justice  Winslow  gave  the  following  opinion  in  the 
case  of  Black  v.  The  State,  113  Wis.  205  (1902): 

"Under  the  foregoing  constitutional  limitations,  while  classifica- 
tion is  proper,  there  must  be  uniformity  within  the  class;  and  the  pro- 
visions of  Ch.  355,  Laws  of  1899  (authorizing  an  inheritance  tax 
where  the  whole  estate  is  S10,000  in  value,  or  over,  but  not  authoriz- 
ing such  tax  where  the  estate  is  less  than  $10,000  in  value,  or  over, 
the  beneficiaries  being  of  the  same  class,  and  the  tax  being  levied 
without  regard  to  the  amount  received  by  the  individual  benefi- 
ciary) ,  are  held  unconstitutional,  as  being  an  arbitrary  and  unlawful 
discrimination  between  beneficiaries  of  the  same  class."  (p.  205, 
headnote  5.) 

s  P.  419.  Black  v.  The  State,  p.  232. 

«P.  419.  Nunnemacher  v.  The  State,  129  Wis.  190  (1906), 
p.  197. 

'  P.  419.  Beals  v.  The  State,  139  Wis.  544  (1909),  p.  556. 

The  theory  that  the  tax  on  inheritance  is  regulated  by  State  law 
and  that  it  is  not  a  tax  on  property,  but  a  tax  on  the  privilege  of 
acquiring  property  by  succession,  is  stated  by  Mr.  Justice  Brown 
in  United  States  v.  Perkins,  163  U.  S.  625  (1895),  when  he  says: 
"While  the  laws  of  all  civilized  states  recognize  in  every  citizen 
the  absolute  right  to  his  own  earnings,  and  to  the  enjoyment  of 
his  own  property,  and  the  increase  thereof,  during  his  life,  except 
so  far  as  the  state  may  require  him  to  contribute  his  share  for  pubhc 
expenses,  the  right  to  dispose  of  his  property  by  will  has  always 
been  considered  purely  a  creation  of  statute  and  within  legislative 
control."  .  .  .  "The  act  we  are  now  considering  (the  New  York 
Act)  plainly  intended  to  require  that  a  person  taking  the  benefit 

444 


DEVELOPMENT  OF  PRIVATE  PROPERTY  445 

of  a  civil  right,  secured  to  him  under  our  laws,  should  pay  a  certain 
premium  for  its  enjoyment.  .  .  .  This,  therefore,  is  not  a  tax 
upon  the  property  itself,  but  is  merely  the  price  exacted  by  the 
state  for  the  privilege  accorded  in  permitting  property  so  situated, 
to  be  transferred  by  will  or  by  descent  or  distribution."  See  also 
Plummer  v.  Coler,  178  U.  S.  115  (1900);  Scholey  v.  Rew,  23  WaU. 
331  (1874);  In  re  Mackey  Estate,  46  Col.  79  (1909);  Hopkins 
Appeal,  77  Conn.  644  (1905);  State  v.  Guilbert,  70  0.  S.  229  (1904); 
In  re  Fox's  Estate,  154  Mich.  5  (1908). 

The  courts  have  therefore  held  that  franchises,  stocks,  and  all 
manner  of  property  can  be  reached  by  the  inheritance  tax,  even 
United  States  bonds,  ordinarily  exempt  from  taxation:  Plummer  v. 
Coler,  178  U.  S.  115  (1900);  The  Succession  of  Levy,  115  La.  377 
(1905);  In  re  Whiting,  150  N.  Y.  27  (1896).  The  inheritance  tax 
laws  have  generally  been  held  not  to  come  under  the  customary 
constitutional  provisions  which  provide  that  laws  imposing  taxes 
shall  distinctly  declare  the  tax  and  the  objects  to  which  it  is  to  be 
applied.  Nor  do  inheritance  tax  laws  come  under  the  ordinary 
constitutional  provisions  which  declare  that  tax  laws  shall  have  a 
uniformity  and  equality  of  operation.  Union  Trust  Co.  v.  Wa3Tie 
Probate  Judge,  125  Mich.  487  (1901);  In  re  McPherson,  104  N.  Y. 
306  (1887);  Chambe  v.  Judge  of  Probate,  100  Mich.  112  (1894); 
Thompson  v.  Kidder,  74  N.  H.  89  (1906);  In  re  Fox's  Estate,  154 
Mich.  5  (1908);  Estate  of  Campbell,  143  Cal.  623  (1904);  In  re 
Estate  of  Speed,  216  111.  23  (1905) ;  State  v.  Vinsonhaler,  74  Neb. 
675  (1905);  Tyson  v.  State,  28  Md.  577  (1868);  Minot  v.  Winthrop, 
162  Mass.  113  (1894). 

The  laws  are  thus  allowed  a  wide  range  of  operation.  They  can 
fix  a  minimum  below  which  the  tax  is  not  operative,  although  some 
of  the  courts  have  required  this  minimum  to  be  "reasonable  ". 
In  Massachusetts  $10,000  has  been  declared  reasonable  [Minot 
V.  Winthrop,  162  Mass.  113  (1894)],  while  in  Ohio  an  exemption 
of  $20,000  has  been  declared  unreasonable  and  imconstitutional 
[State  V.  Ferris,  53  O.  S.  314  (1895)]. 

The  laws  may  discriminate  between  direct  and  collateral  heirs 
[Minot  V.  Winthrop,  162  Mass.  113;  Beals  v.  State,  139  Wis.  544 
(1909);  In  re  Keeney,  194  N.  Y.  281  (1909)].  And  while  the  courts 
construe  such  legislation  strictly,  against  the  government  and  in 
favour  of  the  taxpayer,  they  have  gone  so  far  as  to  declare  the  re- 


446    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

troactive  clauses  in  some  of  the  statutes  as  valid.  Matter  of  Delano, 
176  N.  Y.  486  (1903) ;  Matter  of  Kidd,  188  N.  Y.  274  (1907). 

The  principle  of  taxing  inheritance  is  extended,  in  some  States, 
to  gifts  intended  to  take  effect  upon  the  death  of  the  donor.  (One 
way  of  evading  the  tax.)  Emmons  v.  Shaw,  171  Mass.  410  (1904); 
In  re  Miller,  77  N.  Y.  App.  Div.  473  (1902) ;  State  v.  Pabst,  139  Wis. 
561  (1909);  /n  re  Edwards,  85  Hun.  (N.  Y.)  436  (1895). 

8  P.  419.  Vol.  XXXVII,  p.  1553. 

8  P.  420.  Village  Communities,  p.  42. 

"  P.  420.  In  Handwbrterhuch  der  Staatswissenschaften,  (1892), 
art.  "Erbrecht." 

"P.  421.  In  some  States  a  widow  can  relinquish  her  "dower" 
and  take  a  child's  share,  if  she  finds  it  more  advantageous.  It 
would  be  so  if,  for  example,  there  is  only  one  child.  Furthermore 
this  gives  her  more  than  a  life  estate.  Also,  it  may  be  noticed  that 
a  widower  has  a  curtesy  in  the  estate  of  his  deceased  wife.  But 
the  reader  will  not  expect  the  author  to  enter  into  all  the  complex 
details  of  the  concrete  laws  of  inheritance,  for  these  in  themselves 
could  fill  a  volume.  The  purpose  here  is  simply  to  indicate  guiding 
principles. 

12  P.  421.  There  are  various  methods  whereby  this  system  may 
be  carried  out.  One  may  take  (a)  the  children  and  then  let  children's 
children  inherit  in  place  of  a  deceased  son  or  daughter.  This  is 
legally  called  "representation  ".  The  result  may  be  great  inequali- 
ties among  cousins,  etc.  One  may  take  lines  beginning  (b)  with 
the  parents  and  their  descendants  and  allow  "representation" 
(c)  with  the  grandparents.  Then  the  closest  line  excludes  the  others 
entirely. 

"  P.  421.  First,  parents  and  children,  then  brothers  and  sisters, 
then  children  of  brothers  and  sisters.  "Representation"  is  thus 
strictly  excluded;  brother's  children  would  not  inherit  if  a  brother 
were  still  living.  This  is  called  "gradual  system  ".  Austria  is  re- 
garded as  a  pure  type  of  the  first  or  parentelic  system;  most  coun- 
tries have  a  mixture  of  1  and  2. 

14  p^  424.  See  Ely's  French  and  German  Socialism,  Chap.  IV, 
"Saint-Simon";  also  the  art.  on  "Erbrecht"  by  Professor  von 
Scheel,  already  cited. 

15  P.  424.  Pp.  97-108. 
"  P.  424.  P.  99. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  447 

"  P.  427.  "  In  erster  Linie  ist  sein  Grund  und  Zweck  die  materielle 
Kontinuitat  und  Sicherstellung  der  Familic."  From  art.  "Er- 
brecht  und  Erbschaftssteuer"  in  Schmollcr's  Jahrbuch  fiir  Gesetzge- 
hung,  Verwaltung  und  Volkswirtschaft,  5ter  Jahrgang,  Ites  Heft, 
1881,  p.  192. 

18  P.  427.  See  Adolf  Trendelenburg,  Naturrecht  auf  dem  Grunde 
der  Ethik  (2d  ed.,  Leipzig,  1868),  where  "Erbrecht"  is  treated 
under  "Recht  der  Familie, "  §§  141-149,  especially  §  141. 

"P.  427.  As  quoted  by  Wagner,  Finanzwissenschaft  (2d  ed.), 
Vol  II,  p.  569. 

2«  P.  427.  In  the  United  States  we  still  have  the  absurd  anachron- 
ism that  in  cases  of  intestacy  a  relative  may  inherit  the  property 
of  a  decedent,  no  matter  how  distant  the  relationship.  The  fol- 
lowing is  quoted  from  the  American  and  English  Encydopcedia  of 
Law  (2d  ed.,  Vol.  11,  p.  320  note) : 

"The  dying  intestate  without  heirs  is  now  practically  the  only 
ground  of  escheat  which  is  worth  considering;  for  relations  succeed, 
however  distant,  provided  only  they  give  evidence  of  their  pro- 
pinquity. "    3  Washburn  on  Real  Property  (5th  ed.)  *  444. 

The  Cyclopaedia  of  Law  and  Procedure  has  the  following  statement : 

"In  Maryland,  by  an  early  statute,  the  personal  estate  of  persons 
dying  intestate,  without  any  relations  within  the  fifth  degree  of 
consanguinity,  were  distributed  to  certain  schools  or  colleges  of 
the  county  in  which  the  deceased  resided."  Thomas  v.  Frederick 
County  School,  7  Gill  &  Johnson,  369  (Vol.  14,  p.  37  note). 

In  the  above  mentioned  case,  Thomas  v.  Frederick  School  (1837), 
it  was  stated: 

"By  an  act  passed  in  1729,  Ch.  24,  Sec.  17,  the  administrators 
of  persons  having  no  representatives  witliin  the  limited  degrees, 
were  directed  to  pay  the  balance  of  the  estate  in  their  hands  to 
the  visitors  of  the  pubhc  schools."    (7  Gill  &  Johnson,  369,  p.  381.) 

"The  personal  estates  of  persons  dying  intestate  without  any 
relations  within  the  fifth  degree  of  consanguinity  or  affinity  are 
distributed  to  the  free  schools,  or  to  such  schools  of  the  county 
to  which  the  public  aid  had  been  by  law  extended,  in  case  there 
should  be  no  college  or  free  school  in  the  county."  {Op.  cit.,  p. 
369,  headnote.) 

This  policy  was  based  on  an  early  desire  of  the  colonial  legislature 
to  estabUsh  schools.    The  statutes  of  Maryland  to-day  show  no 


448    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

such  thing  as  escheat  where  there  are  any  heirs.  In  fact,  the  above 
instances,  limiting  the  degrees  of  intestate  inheritance,  appear  to 
be  quite  exceptional.  The  Wisconsin  Constitution,  Art.  IX,  Sec.  3, 
has  this  provision  concerning  escheat: 

"The  people  of  the  state,  in  their  right  of  sovereignty,  are  de- 
clared to  possess  the  ultimate  property  in  and  to  all  lands  within 
the  jurisdiction  of  the  state;  and  all  lands  the  title  to  which  shall 
fail  from  a  defect  of  heirs  shall  revert  or  escheat  to  the  people." 

21  P.  428.  See  The  Forum  for  December,  1886. 

*2  P.  428.  The  Roman  law  provided  as  follows: 

"A  will  is  void  if  the  parents  or  children,  or  in  certain  cases,  the 
brothers  and  sisters,  of  the  testator  are  disinherited."  Institutes 
Justinian,  2, 18,  pr.    Quoted  in  Hunter,  Roman  Law,  p.  780. 

"The  amount,  after  the  analogy  of  the  lex  Falcidia,  is  one  quarter 
of  the  amount  the  complainant  would  have  obtained  had  the  deceased 
died  without  making  a  will."  Institutes  Justinian  2,  18,  6;  Hunter, 
op.  cit,  782. 

"As  the  duty  of  the  testator  was  based  on  a  moral  claim,  it  ceased 
to  exist  if  there  was  grave  misconduct  on  the  part  of  the  persons 
entitled.  For  a  long  time  there  was  no  definite  standard  by  which 
the  delinquencies  of  children  should  be  judged,  as  there  was  at  first 
no  definite  share  of  the  inheritance  they  could  claim.  Justinian 
settled  the  grounds  definitely.  See  Novels,  115,  3.  Hunter,  op.  cit., 
p.  783. 

The  grounds  for  disinheriting  a  child  were  as  follows: 

1.  Assaulting  parent. 

2.  Other  serious  and  disgraceful  injury. 

3.  Accusing  parent  of  any  crime,  except  treason. 

4.  Associating  with  dabblers  in  witchcraft. 

5.  Attempting  parents'  life. 

6.  Adultery  with  father's  wife  or  concubine. 

7.  Informing  against  parent,  and  putting  him  to  great  costs. 

8.  Refusing  to  become  surety  for  parent  to  procure  release 

from  prison. 

9.  Successfully  frustrating  attempt  of  parent  to  make  a  will, 

parent  later  making  one. 

10.  Following  profession  of  comic  actor  or  gladiator,  unless 

parent  did  so. 

11.  Daughter  prostituting  herself,  or  marrying  without  par- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  449 

ents'  consent,  but  excused  if  dowry  not  provided  before 
she  was  twenty-three. 

12.  Neglecting  to  take  charge  of  insane  parent. 

13.  Neglecting,  although  able,  to  redeem  parent  from  captivity. 

14.  Heterodoxy  of  the  child  {Novels,  115, 3, 4). 

In  turn  the  grounds  for  disinheriting  parents  {Novels,  115,  4) 
were  largely  reciprocal  of  the  above  provisions,  and  those  for  dis- 
inheriting brothers  and  sisters  {Novels,  22,  47  pr.)  were,  (1)  at- 
tempts on  the  life  of  the  testator;  (2)  accusation  of  capital  offence; 
(3)  endeavouring  to  deprive  him  of  property.  Hunter,  Roman  Law, 
p.  783. 

It  is  interesting  to  compare  the  Roman  law  with  the  German 
law.  The  Roman  law  makes  a  will  void  if  certain  near  relatives 
are  disinherited.  The  German  law  lets  the  will  stand,  but  allows 
each  one  to  recover  his  "duty  part".  Similarly  it  is  interesting 
to  compare  the  grounds  permitting  disinheritance  in  both  legal 
systems.    The  underlying  ideas  seem  to  be  similar. 

2' P.  430.  See  art.  "Erbrecht"  (Erbrecht  als  Rechtsinstitut) 
by  Bernhoft,  Conrad's  Handworterbuch  der  Staatswissenchaften, 
3d  ed.,  p.  1023  et  seqq.,  and  also  Das  deutsche  Erbschaftsrecht  by  Max 
Hallbauer,  2d  ed.,  pp.  95-127. 

2*  P.  432.  The  Inheritance  Tax  (Columbia  University  Studies 
in  History,  Economics,  and  PubUc  Law,  Vol.  IV,  No.  2),  pp.  114- 
118. 

2^  P.  436.  This  is  the  case  of  State  of  Ohio  ex  rel.  1.  v.  Ferris,  53  0. 
S.  314  (1895).  The  case  is  an  entertaining  one.  The  court  admits 
the  right  of  the  State  to  tax  property  and  to  pass  laws  taxing  inheri- 
tance, but  it  says  this  particular  law  is  in  conflict  with  the  bill  of 
rights:  "All  political  power  is  inherent  in  the  people.  Government 
is  instituted  for  their  equal  protection  and  benefit."  This  statute 
exempted  $20,000,  and  the  court  declared  that  this  contravened  the 
equality  clause. 

^  P.  438.  See  art.  in  The  Review  of  Reviews,  September,  1894, 
by  Honourable  F.  W.  Holder,  which  speaks  of  this  practice  in 
South  Australia. 

2^  P.  438.  Principles  of  Political  Economy,  Bk.  II,  Chap.  II,  §§  3-4. 

«P.  439.  The  late  Professor  J.  C.  Bluntschli,  of  Heidelberg, 
has  some  interesting  suggestions  concerning  inheritance,  which  the 
author  has  briefly  described  in  the  North  American  Review  for  July, 


450    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

1891.  See  also  Bluntschli's  Gesammelte  Kleine  Schriften,  Vol.  I,  No. 
IX,  "Das  Erbrecht  und  die  Reform  des  Erbrechts." 

29  P.  440.  Rev.  L.  R.  Phelps. 

sop,  441.  "Property  under  Socialism,"  by  Graham  Wallas,  in 
Fabian  Essays  in  Socialism,  pp.  145-146.  This  is  in  harmony  with 
the  general  thought  of  many  that  income  should  in  some  way  be 
commensurate  with  social  services. 

"P.  443.  Detailed  statements  about  the  present  status  of  in- 
heritance taxation  do  not  belong  here.  They  could  well  make  a 
volume  of  themselves.  The  author's  views  find  further  elucidation 
in  his  book  The  Evolution  of  Industrial  Society,  Pt.  II,  Chap.  VII, 
and  some  references  to  literature  will  be  found  there.  The  reader 
should  especially  consult  Dr.  Max  West's  monograph  already  cited, 
and  Dos  Passos,  The  Law  of  Collateral  and  Direct  Inheritance, 
Legacy  and  Succession  Taxes  (St.  Paul,  1895);  also  for  recent 
legislation  and  decisions  see  Ross  on  Inheritance  Taxation  (San 
Francisco,  1912). 


CHAPTER  XVIII 

THE  PRESENT  AND  FUTURE  DEVELOPMENT  OF  PRI- 
VATE PROPERTY  (Continued):  the  fluidity  of 

PROPERTY  ^ 

It  was  stated  in  a  preceding  chapter  that  by  death  the 
great  bulk  of  property  changes  hands  once  in  a  genera- 
tion, and  that  the  manner  of  its  transmission  from  gener- 
ation to  generation  may  be  regulated  indefinitely  with 
corresponding  effects  on  the  distribution  of  wealth.  But 
this  presupposes  that  property  is  mostly  in  the  hands  of 
private  individuals  and  that  its  use  and  flow  have  not 
been  definitely  fixed  by  former  generations;  in  other 
words,  we  have  taken  the  fluidity  of  property  for  granted. 
This  expression  ''the  fluidity  of  property"  is  one  which 
was  coined  for  the  present  purpose,  and  the  author  hopes 
that  it  is  felicitous,  as  it  seems  to  define  what  is  meant 
when  property  changes  hands  once  in  a  generation 
through  death  and  the  manner  of  its  transmission  is 
regulated  by  statute  law,  when  the  regulation  is  indef- 
inite, almost  unlimited;  and  this  regulation  of  the  flow 
of  property  produces  a  corresponding  effect  upon  the 
distribution  of  wealth.  But  all  this  presupposes  that 
property  is  in  private  hands.  In  other  words,  we  take 
the  fluidity  of  property  for  granted. 

451 


452    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

As  a  matter  of  fact,  an  examination  of  economic  his- 
tory, even  if  very  cursory,  shows  us  that  the  nature  of 
man  and  of  human  society  sets  in  operation  forces  which 
tend  to  check  the  free  and  easy  flow  of  property  both 
from  the  hving  to  the  Hving  and  from  the  dead  to  the 
living.  In  other  words,  the  nature  of  man  and  of  human 
society  sets  in  operation  forces  which  tend  to  produce, 
and  will  produce  unless  measures  are  taken  to  prevent 
it,  what  we  may  call  the  ossification  of  property.  Conse- 
quently, the  fluidity  of  property,  rendering  it  amenable 
to  social  control  for  social  purposes,  cannot  be  main- 
tained without  social  effort. 

When  it  is  said  that  property  changes  hands  once  in 
a  generation,  it  at  once  suggests  itself  that  this  is  not 
true  of  public  property,  because  public  property  be- 
longs to  an  organised  society  which  is  conceived  of  as 
having  perpetual  existence.  So  we  have  to  exempt 
public  property  from  that  which  changes  hands  once 
in  a  generation,  for  public  libraries,  school  houses,  water 
works,  etc.,  do  not  make  this  change.  But  when  the 
property  itself  is  public,  the  social  control  for  social  ends 
is  not  in  its  nature  difficult.  Public  property  carries 
with  it  social  control.  That  is  the  very  idea  of  public 
property.  Public  property,  therefore,  whether  it  is 
large  or  small  in  amount,  does  not  present  any  difficulty 
so  far  as  the  fluidity  of  property  is  concerned,  being  in 
its  very  nature  amenable  to  social  control.  It  is  only 
in  an  inefficient  or  corrupt  commonwealth  that  diffi- 
culties of  this  sort  would  arise.  Thus  we  must  ask 
simply,  How  far  is  it  desirable  to  extend  the  limits  of 
public  property?    This  is  the  only  necessary  question 


DEVELOPMENT  OF  PRIVATE  PROPERTY  453 

SO  far  as  public  property  is  concerned;  and  if  we  have 
too  much  pubUc  property,  it  is  not  difficult  to  get  rid 
of  it.  The  greater  difficulty  for  the  public  as  well  as  for 
the  individual  is  to  acquire  property. 

But  it  is  not  alone  the  state  that  lacks  the  attribute 
of  mortality.  It  is  the  case  with  corporations  generally, 
but  it  is  especially  the  case  with  ecclesiastical  corpora- 
tions of  various  sorts,  including  religious  houses  which 
have  so  tied  up  property  as  to  check  effectually  its  free 
flow.  This  was  especially  true  in  past  ages.  Whether 
these  ecclesiastical  corporations  are  regarded  as  public 
or  private  bodies,  the  property  which  is  made  over  to 
them  or  which  is  acquired  by  them  in  any  way,  is  under 
their  control  for  their  purposes.  Their  acquisition  of 
property  is  promoted,  first,  by  the  piety  and  the  fears 
of  man,  especially  in  view  of  approaching  death  with 
all  the  uncertainties  of  the  future;  second,  by  their  per- 
petual life  and  vigour;  and  third,  by  their  total  or  par- 
tial exemption  from  taxation. 

Productive  property  is  now  usually  taxed  even  if  it 
does  belong  to  ecclesiastical  bodies;  nevertheless  a 
point  here  requires  consideration.  The  nature  of  man 
is  very  much  the  same  everywhere,  and  under  the  head 
of  non-productive  property,  property  is  often  included 
which  sooner  or  later  is  destined  to  become  productive 
property,  and  which  is  steadily  gaining  in  value.  The 
author  observed  this  abuse  when  he  was  a  member  of 
the  Maryland  Tax  Commission  in  1888.  He  found  that 
people  were  including  in  property  belonging  to  a  par- 
sonage or  church  a  great  deal  of  land  which  was  held 
for  speculative  purposes  and  which,  under  the  claim 


454    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

that  it  was  used  for  religious  purposes,  was  exempt 
from  taxation.  To  prevent  this  abuse  the  Maryland 
Tax  Commission  in  1888  unanimously  recommended  the 
taxation  of  parsonages  and  all  church  property  except 
the  house  of  worship  and  the  ground  necessary  for  its 
uses,  which  was  limited  to  ten  feet  on  either  side  of  the 
building.  But  it  was  quite  useless  to  make  such  a  rec- 
ommendation. The  religious  bodies  were  opposed  at 
once,  and  the  recommendation  was  not  even  considered 
by  the  legislature.  This  shows  how  difficult  it  is  to  rem- 
edy such  an  abuse.  And  a  curious  part  of  it  is  that  this 
abuse  which  attracted  attention  in  Maryland  in  1888 
existed  in  England  five  hundred  years  ago.  One  device 
after  another  was  resorted  to  for  including  under  the 
head  of  property  used  for  religious  purposes,  property 
which  was  really  used  for  other  purposes,  in  order  to 
acquire  and  hold  it  and  to  claim  for  it  exemption  from 
pubHc  obligations  resting  on  other  property.  It  appears 
from  Blackstone  that  in  England  the  Statute  of  15  Rich- 
ard II,  ch.  5,  sought  to  remedy  this  abuse, — "And 
whereas  the  Statutes  had  been  eluded  by  purchasing 
large  tracts  of  land,  adjoining  to  churches,  and  conse- 
crating them  in  the  name  of  church-yards,  such  subtile 
imagination  is  also  declared  to  be  within  the  compass  of 
the  Statutes  of  Mortmain."  ^  As  what  they  desired  was 
to  avoid  these  Statutes  of  Mortmain,  the  churches  ac- 
quired large  tracts  of  land  and  consecrated  them  under 
the  name  of  churchyards.  The  consequence  is  that  at 
various  times  in  its  history  the  Church  has  acquired 
large  fractional  parts  of  the  land  and  wealth  of  nations, 
and  this  property  has  thus  ceased  to  be  fluid. ^    This 


DEVELOPMENT  OF  PRIVATE  PROPERTY  455 

has  happened  m  England,  Spain,  and  France,  and 
generally  throughout  the  civilised  world  we  have  had 
legislation  designed  to  prevent  this  concentration  of 
property  without  fluidity.  Some  people  fear  only  the 
concentration,  but  it  is  the  concentration  without 
fluidity,  without  being  amenable  to  control,  which  is 
a  large  part  of  the  evil.  If  property  passes  into  dif- 
ferent hands  from  one  generation  to  another  we  can 
easily  direct  it  and  make  it  conform  to  the  ideas  of 
the  time;  but  if  it  is  tied  up  in  corporations  it  is  not  so 
easily  controlled.  Property  in  such  a  case  is  said  to  be- 
long to  the  "dead  hand  ",  or  to  be  in  mortmain  {mortua 
many),  for  it  belongs  to  ecclesiastical  bodies  the  mem- 
bers of  which  were  regarded  as  dead  (being  professed, 
meaning  monks  and  nuns,  according  to  Sir  Edward 
Coke's  conjecture,  which  seemed  to  Blackstone  the  most 
plausible). 

In  England  we  have  then  the  Statutes  of  Mortmain, 
beginning  in  1225,  designed  to  prevent  this  concentra- 
tion or  ossification  of  property,  by  subjecting  the  power 
of  corporations  'Ho  acquire  lands  to  the  discretion  of  the 
crown  or  parliament  as  to  the  grant  of  a  license."  ^  We 
have  also  the  Mortmain  Act  of  9  George  11,  Ch.  36 
(1736),  which  sought  to  prevent  gifts  from  being  made 
in  the  name  of  charity  by  persons  evidently  approach- 
ing death.  In  the  State  of  Ohio  people  were  struggling 
with  this  same  matter  a  few  years  ago,  namely,  with  the 
dangers  resulting  from  playing  upon  the  fears  of  men  at 
such  a  time.  According  to  the  Ohio  statutes  gifts  must 
be  made  a  year  before  death.^  According  to  the  Mort- 
main Act,  save  "the  two  Universities,  their  colleges, 


456    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

and  the  scholars  upon  the  foundation  of  the  colleges 
of  Eton,  Winchester,  and  Westminster,"  all  alienation 
of  lands  for  charitable  purposes  (except  bona  fide  sales) 
was  forbidden  "unless  by  deed  indented,  executed  in 
the  presence  of  two  witnesses  twelve  calendar  months 
before  the  death  of  the  donor,  and  enrolled  in  the  court 
of  Chancery  within  six  months  after  its  execution  (except 
stocks  in  the  public  funds,  which  may  be  transferred 
six  months  previous  to  the  donor's  death),  and  unless 
such  gift  be  made  to  take  effect  immediately,  and  be 
without  a  power  of  revocation."^  Bouvier's  Law  Dic- 
tionary adds  after  the  word  revocation,  ''or  reservation, 
etc.,  except  as  to  a  nominal  rent,  mines  and  minerals,  or 
easements,  building  contract,  or  the  like,  or,  in  case  of 
bona  fide  sales,"  etc.  The  property  must  be  transferred 
in  such  a  way  that  the  gift  is  to  take  effect  at  once  and 
not  after  the  death  of  the  donor,  the  one  making  it  re- 
serving for  himself  some  benefit  from  the  property.  If 
land  was  to  be  alienated  for  charitable  purposes  it  must 
be  in  some  prescribed  form  before  death  and  must  not 
be  made  over  to  take  effect  after  death.  This  was 
done  to  avoid  the  concentration  and  ossification  of 
property. 

The  struggle  was  a  perpetual  one  in  England.  It 
began  "above  sixty  years  before  the  Conquest"  (Black- 
stone).  Under  feudal  tenure,  the  king  as  overlord 
claimed  that  it  was  necessary  to  secure  a  license  from 
him  to  make  it  possible  to  acquire  lands  in  mortmain, 
because  then  he  lost  dues,  chances  of  escheat,  and  the 
possibilities  of  attainder.  Evasions  began  at  once.  The 
loop-holes  and  ingenious  modes  of  evasion  were  endless. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  457 

When  religious  houses  could  not  acquire  property,  bish- 
ops and  other  sole  corporations  discovered  that  they 
were  not  included  under  the  head  of  religious  houses. 
Property  passes  from  bishop  to  bishop,  thus  passing  to 
a  corporation  which  is  perpetual  although  it  represents 
but  one  person.  Wlien  religious  corporations  could  not 
hold  property  it  was  found  that  others  could  hold  prop- 
erty for  these  rehgious  corporations.  It  was  also  found 
that  evasions  could  be  secured  through  actions  to  re- 
cover land  to  which  they  laid  claim  by  fictitious  titles, 
provided  the  owner  ''by  fraud  and  collusion"  made  no 
defence.     (Blackstone). 

This  is  mentioned  to  show  how  difficult  it  has  been 
in  times  past  to  keep  land  from  falling  into  this  "dead 
hand".  Chase,  in  his  edition  of  Blackstone  (p.  428), 
says  the  Statutes  of  Mortmain  are  not  in  force  in  the 
United  States  except  in  Pennsylvania,  where  they  exist 
in  modified  form.  But  statutes  having  similar  intent 
appear  to  be  common.  Special  acts  are  required,  in 
Maryland,  for  example,  to  enable  churches  to  receive 
land  devised  to  them.  We  may  see  here  and  there  a 
slight  tendency  on  the  part  of  churches  in  this  country 
to  acquire  large  property.  Trinity  Church  in  New  York 
City  is  one  of  the  largest  land  owners  in  the  United 
States.  Comparatively  few  American  churches  have, 
to  be  sure,  a  great  deal  of  property,  but  we  notice  that 
a  considerable  number  (absolutely)  have  property,  and 
we  must  also  observe  tendencies. 

We  have  also  libraries,  schools,  colleges,  and  educa- 
tional institutions  generally,  and  in  this  particular  the 
possibilities  of  endowment  require  special  considera- 


458    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

tion.  Let  us  look  ahead  two  hundred  years  and  ask 
ourselves  what  is  going  to  be  the  outcome  if  the  inclina- 
tion to  endow  such  institutions  continues?  Everything 
favours  the  acquisition  of  property  by  libraries,  schools, 
and  colleges.  Some  of  our  universities  have  vast  acqui- 
sitions and  are  favoured  by  being  exempt  from  taxation. 
Will  they  in  perhaps  two  hundred  years  from  now  have 
acquired  such  landed  property  as  will  be  injurious? 
Probably  up  to  the  present  time  they  have  made  an  ex- 
cellent use  of  their  property.  Adam  Smith  thought, 
however,  that  endowments  were  detrimental  to  educa- 
tional institutions,  making  them  careless  and  indiffer- 
ent to  the  life  of  their  times;  but  the  English  univer- 
sities which  he  especially  criticised  have,  since  his  time, 
shown  great  vigour  and  have  come  increasingly  into 
touch  with  the  movements  of  the  day. 

Benevolent  institutions  also  must  be  considered. 
What  is  going  to  be  the  outcome  of  the  acquisition  of 
property  by  such  institutions?  Take,  for  example,  the 
Sailor's  Snug  Harbor,  a  retreat  for  sailors,  which  owns  an 
enormous  amount  of  property  on  Staten  Island;  it  is  said 
to  be  almost  as  great  a  landlord  as  Trinity  Church  and 
somewhat  similar  complaints  have  been  raised  against 
the  management  of  the  property.  The  author  does  not 
pretend  to  criticise  these  institutions  or  to  say  that  the 
alleged  abuses  really  exist,  but  simply  calls  attention  to 
them  as  illustrations  of  possibilities  and  dangers.  He 
also  admits  that,  in  his  opinion,  we  do  not  at  present 
have  reason  to  apprehend  this  danger  from  educational 
institutions,  because  adequate  social  control  is  possible 
and  appears  to  him  altogether  probable.^ 


DEVELOPMEXT  OF  PRIVATE  PROPERTY  459 

A  word  must  be  added  about  entailments  and  their 
substitutes.  Property  is  entailed  when  in  advance  of 
death  the  manner  of  its  descent  is  settled  for  sev- 
eral generations  by  some  head  of  a  house,  and  when  the 
provision  is  continued  in  such  a  manner  that  generally 
no  one  of  the  living  generation  has  full  control.  Suppose 
at  any  given  moment  the  line  of  descent  is  provided  for 
three  generations  in  advance,  and  as  each  generation 
appears  it  provides  for  another  generation,  so  that  the 
living  generation  never  has  control.  Various  substi- 
tutes for  entailment  are  found  in  the  United  States  and 
they  are  increasing  rapidly  because  by  marriage  and 
family  settlements,  creations  of  trusts,  etc.,  similar 
objects  are  attained  though  we  do  not  in  general  have 
entailment,  technically  speaking.  Property  is  made  a 
trust  for  the  family  for  a  certain  length  of  time;  this 
amounts  to  the  same  thing  as  entailment.  Attention 
has  of  late  been  called  to  the  amount  of  property  in  this 
country  which  belongs  to  families  and  not  to  individuals. 
We  often  hear  it  said,  ''This  property  belongs  to  such  an 
estate."  This  means  that  it  belongs  to  a  trust  managed 
in  the  interests  of  the  family.  We  have  similar  arrange- 
ments in  other  lands.^  In  Germany  entailments  are 
called  Fideikommisse,  and  there  appear  to  be  but  slight 
restraints  upon  their  creation.^ 

In  connection  with  the  fluidity  of  property  we  have 
considered  ecclesiastical,  educational,  religious,  and 
charitable  corporations  which  as  a  rule  have  no  share- 
capital.  What  shall  we  say  concerning  private,  com- 
mercial, or  industrial  corporations?  When  we  come  to 
these  we  have  artificial  persons  of  a  different  sort.    They 


460    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

are  organised  on  a  different  basis  and  for  a  different  pur- 
pose. The  property  which  they  represent  is  divided 
into  shares,  or  probably  more  correctly  speaking,  the 
shares  represent  the  property.  These  shares  are  owned 
by  individuals  and  pass  from  generation  to  generation 
as  the  individuals  die.  In  some  particulars,  at  any  rate, 
we  may  thus  say  that  the  property  of  these  corporations 
has  a  fluidity  like  other  property,  for  the  laws  of  inherit- 
ance govern  the  diffusion  of  these  shares.  But  so  far  as 
the  corporations  themselves  are  concerned  it  is  not  so 
easy  to  change  their  nature,  because  they  are  very  apt 
to  be  actually,  if  not  nominally,  perpetual.  One  reason 
that  this  is  so  is  because  the  charters  are  apt  to  be  re- 
garded as  contracts  which,  under  the  Constitution  of  the 
United  States,  cannot  be  changed.  So  corporations  of 
this  kind  have  a  privileged  position  unlike  that  of  nat- 
ural persons,  because  natural  persons  do  not  enjoy 
reserved  property  rights,  rights  of  peculiar  significance, 
as  do  corporations,  inasmuch  as  natural  persons  do  not 
come  into  existence  through  contract  giving  them  re- 
served privileges.  It  is  true  that  the  Dartmouth  Col- 
lege decision  to  some  extent  hardens  or  ossifies  this  class 
of  property  considered  as  belonging  to  a  person,  but  so 
far  as  the  shares  are  concerned,  to  a  very  large  extent, 
the  distribution  of  property  remains  fluid.  The  Balti- 
more and  Ohio  railway  corporation,  for  instance,  can- 
not very  easily  be  changed  in  its  nature.  It  is  per- 
petually exempt  from  taxation  under  the  charter  prin- 
ciple, and  that  principle  is  somewhat  hardened  in  the 
Dartmouth  College  decision ;  and  so  far  as  the  shares  are 
concerned  which  represent  the  existence  of  this  property, 


DEVELOPMENT  OF  PRIVATE  PROPERTY  461 

they  pass  according  to  the  ordinary  laws  of  inheritance 
from  one  generation  to  another. 

The  latest  tendency  is  to  regard  charters  as  permits 
rather  than  as  contracts.  States  nowadays  do  not  give 
away  an  unlimited  charter.  The  Constitutions  of  most 
States  forbid  it  and  charters  are  now  regulated  by  law, 
even  to  the  extent  of  fixing  the  price  of  the  commodity.  ^° 
Also  we  admit  that  the  exemption  from  taxation  men- 
tioned, namely  that  of  the  Baltimore  and  Ohio  Railway, 
is  uncommon.  Such  cases  occurred  during  days  when 
people  were  eager  for  railways;  they  could  not  now 
easily  recur  under  modern  constitutional  limitations. 
Also  the  tendency  of  courts  is  to  work  away  from  the 
spirit  of  the  Dartmouth  College  case  even  if  not  to  re- 
verse it.^^  Also,  the  exemption  from  taxation  is  simply 
a  gift  and  the  exemption  once  made  should  be  repur- 
chasable.  Nevertheless,  we  have  the  old  survivals  and 
tendencies  towards  ossification  under  our  constitutional 
decisions;  and  unless  we  are  on  our  guard  we  may  slip 
back  into  bad  conditions  as  our  ancestors  did  in  Eng- 
land. Perpetual  vigilance  here  as  elsewhere  is  the  price 
of  economic  liberty. 

We  may  roughly  call  the  dead  hand  any  perpetual 
artificial  person,  and  when  we  say  any  perpetual  arti- 
ficial person  we  have  in  mind  any  person  actually  per- 
petual even  if  not  theoretically  so.  Our  constitutional 
provisions  are  such  as  sometimes  to  make  a  corpora- 
tion actually  perpetual  even  if  not  theoretically  per- 
petual. Constitutional  provisions  sometimes  contradict 
each  other,  and  go  sometimes  in  one  direction  and  some- 
times in  another;  but  the  tendency  is  for  the  decisions  of 


462     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

the  court  to  make  corporations  actually  perpetual  even 
when  they  are  not  nominally  perpetual.  The  court's 
decision  in  the  Broadway  Surface  Railway  case  is  of 
special  importance;  in  this  case  a  corporation  was  dis- 
solved under  the  reserved  power  of  the  legislature,  but 
the  arrangement  was  such  that  the  corporation  really 
to  all  intents  and  purposes  actually  existed;  one 
corporation  simply  took  the  place  of  another,  to 
use  and  manage  the  franchise  and  other  property 
in  the  interests  of  the  shareholders  and  the  bond- 
holders.^^ 

But  especially  do  we  have  in  mind,  in  the  dead  hand, 
charitable,  educational,  and  religious  corporations. 
The  property  of  this  kind  of  corporation  loses  its  fluidity 
and  its  social  adaptability  in  part  by  provisions  of 
donors,  which  have  continuous  effect  even  to  defeating 
the  purposes  which  the  testator  had  at  heart  or  to  carry- 
ing out  baleful  purposes,  such  as  spite,  etc. 

Discussions  concerning  endowment,  in  the  eighteenth 
century,  are  of  importance  to  us,  if  we  wish  to  look  at 
the  matter  fairly  and  not  merely  with  reference  to  tem- 
porary conditions.  Adam  Smith  opposed  educational 
endowments,  scholarships,  professorships,  etc.,  because 
he  said  that  they  increased  indolence,  and  he  pointed  to 
Oxford  as  confirmation,  though  possibly  he  considered 
this  indolence  as  a  temporary  condition.  He  attributed 
the  conditions  at  Oxford,  with  which  he  was  personally 
familiar,  to  its  endowments.  He  said  also  that  scholar- 
ships extended  and  increased  competition  and  lowered 
remuneration,  and  pointed  to  preachers,  writers,  and 
teachers  receiving  such  small  salaries  because  scholar- 


DEVELOPMENT  OF  PRIVATE  PROPERTY  463 

ships  and  endowments  made  it  so  easy  to  enter  these 
occupations  that  the  remuneration  became  small. ^^ 

Perhaps  still  more  important  is  Turgot's  discussion. 
He  was  very  strongly  opposed  to  endowments.  He 
said  that  the  vanity  of  the  founder  was  very  frequently 
the  sole  true  motive,  and  that  worship  and  pubhc  utility 
were  but  a  veil.  The  reasons  for  his  opposition  were 
somewhat  as  follows,  ''A  founder  is  a  man  who  desires 
to  eternalise  the  effect  of  his  wishes,"  but  his  faculties 
are  limited;  in  desiring  to  do  good,  he  may  do  evil.  He 
says  that  men  have  founded  houses  of  refuge  for  fallen 
women,  and  have  provided  that  they  must  offer  evidence 
of  their  fall  before  admission,  which  provision  is  calcu- 
lated to  do  harm  rather  than  good.  In  regard  to  asy- 
lums and  charities,  he  says  that  they  do  not  effect  the 
end  in  view,  but  increase  rather  than  lessen  misery. 
Then  secondly,  he  says,  even  if  these  institutions  per- 
form a  useful  function  at  the  start,  it  is  impossible  to 
maintain  permanently  the  spirit  of  the  founder  when 
they  pass  into  new  hands  for  administration.  Gradually 
the  zeal  and  the  good  will  lessen  and  formalism  enters  to 
take  the  place  of  the  spirit  which  animated  the  founder. 
Thirdly,  times  change  and  new  needs  arise.  The  wars 
of  Palestine  during  the  Crusades  have  given  rise  to  num- 
berless foundations,  and  these  continue  though  the 
wars  ceased  long  ago.  In  the  fourth  place,  he  points  to 
the  extravagant  edifices  built  by  foundations,  edifices 
which  are  wasteful  and  which  involve  waste.  And 
fifthly,  he  says  that  it  is  better  to  satisfy  the  needs  aris- 
ing from  calamities  such  as  floods,  etc.,  at  the  time  they 
arise,  than  to  make  provisions  for  them  by  foundations. 


464    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

It  is  on  this  account  that  he  applauds  the  royal  edict  of 
1769  which  places  restrictions  on  the  creation  of  new 
foundations.  He  claims  that  the  right  of  government  is 
incontestable  ''to  dispose  of  ancient  foundations,  to  di- 
rect their  funds  to  new  objects,  or  better  still  to  suppress 
them  entirely.  Public  utility  is  the  supreme  law,  and 
should  be  balanced  neither  by  a  superstitious  respect  for 
what  one  calls  the  intention  of  the  founders — as  if  indi- 
viduals, ignorant  and  limited,  had  the  right  to  impose 
their  capricious  desires  on  unborn  generations;  nor  by 
the  fear  of  wounding  pretended  rights  of  certain  bodies, 
as  if  these  private  bodies  {corps  particuliers)  had  any 
rights  in  opposition  to  the  state !  Citizens  have  rights, 
but  these  bodies  exist  only  for  society  and  ought  to 
cease  to  exist  the  moment  they  cease  to  be  useful." 
He  goes  on  to  say,  in  conclusion,  that  the  work  of  man 
is  not  made  for  immortality  and  that  the  foundations 
multiplied  by  vanity  will  in  time  absorb  all  the  land 
and  all  the  property  of  individuals,  and  that  it  must 
be  right  to  destroy  them  in  order  to  prevent  this  con- 
summation.^^ 

It  is  really  strange  that  anyone  should  think  that 
the  dead  have  a  right  to  impose  their  wishes  and  de- 
sires upon  unborn  generations,  and  yet  some  do  think 
that  there  is  a  right  of  that  kind.  It  is  something  which 
is  to  the  writer  almost  incomprehensible,  and  it  cannot 
by  any  possibihty  stand  the  test  of  any  critical  examina- 
tion. What  does  it  mean  to  say  that  we  keep  faith  with 
the  dead?  We  in  the  United  States  at  least  are  not 
generally  inclined  to  give  excessive  reverence  to  the 
dead.    It  would  perhaps  be  well  if  in  many  particulars 


DEVELOPMENT  OF  PRIVATE  PROPERTY  465 

we  honoured  them  more  than  we  do  and  gave  more  heed 
to  the  views  expressed  by  them  when  ahve.  This  might 
help  us  in  putting  a  firmer  foundation  under  the  family 
as  an  institution.  At  the  same  time,  the  earth  belongs 
to  the  living,  and  we  cannot  be  enslaved  by  the  dead, 
who,  if  they  have  immortal  souls  still  contemplating 
mundane  affairs,  we  may  assume  would  have  new  wis- 
dom and  would  wish  changes  in  their  bequests  to  carry 
out  their  purposes.  ^^ 

The  conclusions  which  follow  suggest  themselves. 
Certain  measures  are  needed  to  preserve  the  fluidity  of 
property.  It  seems  to  be  necessary  to  place  some  re- 
strictions upon  the  acquisition  of  property  by  the  dead 
hand.  We  need  to  go  back  to  a  more  conservative 
policy.  We  also  need  a  reversal  of  the  Dartmouth  Col- 
lege decision;  and  in  fact  new  decisions,  as  already  in- 
dicated, are  lessening  its  force.  We  may  need  an  amend- 
ment to  the  Constitution  of  the  United  States.  We 
need  to  lift  the  control  of  the  dead  from  the  property 
of  the  living,  or  at  least  to  restrict  it  greatly.  So  much 
has  been  accomplished  in  England  that  conditions  of 
bequests  can  now  be  changed,  and  the  effects  are  said  to 
be  beneficial.  ^^ 

We  are  to  understand,  of  course,  that  bequests  should 
not  be  changed  without  a  cause.  It  would  always  be 
necessary  to  show  cause  for  a  change  before  a  court  of 
some  kind.  John  Stuart  Mill  has  some  discussion  of 
this  subject. ^^  He  would  not  allow  testators  to  prescribe 
what  opinion  might  be  taught,  because  that  would  in- 
terfere with  freedom  of  thought. 

Attention  may  be  called  especially  to  a  letter  written 


466    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

by  Thomas  Jefferson  to  Thomas  Earle  of  Worcester, 
Massachusetts,  dated  Monticello,  September  24,  1823.^^ 
It  reads  as  follows: 

"  That  our  Creator  made  the  earth  for  the  use  of  the  living, 
and  not  of  the  dead;  that  those  who  exist  not  can  have  no 
use  nor  right  in  it,  no  authority  or  power  over  it;  that  one 
generation  of  men  cannot  foreclose  or  burden  its  use  to  an- 
other, which  comes  to  it  in  its  own  right  and  by  the  same 
divine  beneficence;  that  a  preceding  generation  cannot  bind 
a  succeeding  one  by  its  laws  or  contracts,  these  deriving  their 
obligations  from  the  will  of  the  existing  majority,  and  that 
majority  being  removed  by  death,  another  comes  in  its  place, 
with  a  will  equally  free  to  make  its  own  laws  and  contracts; 
these  are  axioms  so  self-evident  that  no  explanation  can  make 
them  plainer;  for  he  is  not  to  be  reasoned  with  who  says  that 
non-existence  can  control  existence,  or  that  nothing  can  movo 
something.  They  are  axioms  also  pregnant  with  salutary 
consequences.  The  laws  of  civil  society,  indeed,  for  the  en- 
couragement of  industry,  give  the  property  of  the  parent 
to  his  family  on  his  death,  and  in  most  civilized  countries 
permit  him  even  to  give  it,  by  testament,  to  whom  he  pleases. 
And  it  is  also  found  more  convenient  to  suffer  the  laws  of 
our  predecessors  to  stand  on  our  implied  assent  as  if  posi- 
tively re-enacted,  until  the  existing  majority  positively  re- 
peals them.  But  this  does  not  lessen  the  right  of  that  major- 
ity to  repeal,  when  ever  a  change  of  circumstances  or  of  will 
calls  for  it.  Habit  alone  confounds  what  is  civil  practice 
with  natural  right." 

The  provisions  in  the  American  Constitutions  and 
Statutes  concerning  perpetuities  seem  for  the  most  part 
to  apply  to  natural  persons  rather  than  to  corporations; 
as  a  general  rule  they  limit  the  tying  up  of  property  to 
lives  in  being  and  to  twenty-one  years,  and  period  of 


DEVELOPMENT  OF  PRIVATE  PROPERTY  467 

gestation.  The  following  are  the  provisions  of  some  of 
the  Constitutions: 

"Perpetuities  and  monopolies  are  contrary  to  the 
genius  of  a  free  state  and  ought  not  to  be  allowed." 
North  Carolina,  1776,  (the  first  place  where  it  occurred) 
23rd  Sect,  of  the  Declaration  of  Rights;  from  North 
Carolina  it  passed  to  other  States. 

"Perpetuities  and  monopolies  are  contrary  to  the 
genius  of  a  free  state  and  shall  never  be  allowed." 
Texas,  1876. 

"Perpetuities  and  monopolies  are  contrary  to  the 
genius  of  a  republic  and  shall  not  be  allowed."  Ar- 
kansas, 1874. 

"Perpetuities  and  monopolies  are  contrary  to  the 
genius  of  a  free  state."    Tennessee,  1870.^^ 

It  has  been  held,  says  Professor  Gray  in  his  work  on 
Perpetuities,  apparently  referring  to  North  Carolina, 
that  this  applied  only  to  estates  entailed  and  has  not 
been  considered  to  affect  gifts  to  charities.  It  has  also 
been  so  held  in  Tennessee.  The  Florida  Constitution 
of  1838  and  also  that  of  1865  have  the  North  Carolina 
provision,  but  the  Constitution  of  1868  dropped  it. 
"These  provisions,"  says  Gray,  "seem  to  be  simply 
pieces  of  declamation  without  juristic  value,  at  least 
on  any  question  of  remoteness."  Even  if  it  is  true  that 
from  the  strictly  legal  point  of  view  they  are  "simply 
pieces  of  declamation  without  juristic  value,"  in  the 
author's  opinion  they  indicate  nevertheless  the  ideals  of 
the  Fathers  of  the  American  Republic.  They  may  have 
been  lost  sight  of  and  have  not  been  carried  out,  but  they 
show  what  the  ideals  were.    The  courts  have  possibly 


468     PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

not  appreciated  their  importance,  and  so  far  as  they 
have  been  brought  before  the  courts  the  decisions  have 
been  of  such  a  kind  as  to  remove  any  significance  from 
them.  If  one  looks  at  it  fairly  and  squarely  one  must 
see  that  what  these  general  provisions  mean  will  de- 
pend upon  the  economic  and  social  philosophy  of  the 
courts  as  well  as  upon  laws  passed  by  the  legislature. 
There  are  many  ways  in  which  we  can  interpret  these 
statements.  Their  interpretation  will  depend  upon  our 
economic  philosophy  and  the  philosophy  of  our  courts 
and  our  legislatures  has  been  such  that  they  have  not 
attached  any  importance  to  these  provisions  which  con- 
sequently have  had  no  value,  although  they  might  have 
value  under  a  different  kind  of  legislation  and  judicial 
interpretation. 

The  Constitution  of  CaHfornia  in  1849  says,  ''No 
perpetuities  shall  be  allowed  except  for  eleemosynary 
purposes."  In  California  private  colleges  and  religious 
bodies  were  taxed  until  recently,  showing  that  the  people 
in  California  had  an  idea  of  living  up  to  these  provisions 
of  the  Constitution,  because  taxation  would  bring  these 
institutions  to  that  extent  under  control. "° 

The  Pennsylvania  Constitution  of  1776  and  the  Ver- 
mont Constitution  of  1793  provide  that  ''the  legisla- 
tiu-e  shall  regulate  entails  in  such  manner  as  to  prevent 
perpetuities."  Later  Constitutions  of  Pennsylvania 
have  no  such  provision,  and  it  seems  to  have  had  no 
effect  either  upon  the  law  in  Vermont. 

Georgia,  Iowa,  and  Kentucky  have  statutes  on  this 
subject.  These  limit  perpetuities  generally  to  lives  in 
being  and  twenty-one  years.     Mississippi,  California, 


DEVELOPMENT  OF  PRIVATE  PROPERTY  469 

Michigan,  Wisconsin,  Minnesota,  Maryland,  Connecti- 
cut, Alabama,  Indiana,  and  New  York  have  statutes 
on  the  subject,  so  we  see  that  they  are  common.  The 
intentions  in  all  these  constitutional  provisions  and 
statutes  are,  first,  to  preserve  equality  of  opportunities 
and,  secondly,  to  preserve  the  fluidity  of  property.  In 
Indiana  it  is  said  in  the  statute  that  'Hhe  absolute  power 
of  aliening  lands  shall  not  be  suspended  by  any  limita- 
tion or  condition  whatever  .  .  .  for  a  longer  period  than 
during  the  existence  of  a  life  or  any  number  of  lives  in 
being  at  the  creation  of  the  estate  conveyed  .  .  .  with 
the  exception  that  a  contingent  remainder  in  fee  may 
be  created  on  a  prior  remainder  in  fee,  to  take  effect  in 
the  event  that  the  person  or  persons  to  whom  the  first 
remainder  is  limited  shall  die  under  the  age  of  twenty- 
one  years,  or  upon  any  other  contingency  by  which  the 
estate  of  such  persons  may  be  determined  before  they 
attain  their  full  age."-^  The  idea  is  to  keep  the  prop- 
erty fluid.  That  seems  to  be  the  idea  with  all  of  these 
provisions  so  far  as  the  general  principle  is  concerned.-- 


Notes  and  References  to  Chapter  XVIII 

1  P.  451.  The  literature  on  this  subject  in  its  general  aspects  is 
scanty  indeed,  but  we  have  a  great  deal  on  special  phases  of  it.  A 
book  devoted  to  one  of  the  most  important  aspects  of  the  subject 
is  entitled  The  Dead  Hand,  by  Sir  Arthur  Hobhouse;  we  have  Black- 
stone  on  Mortmain,  Commentaries,  Bk.  II,  Chap.  XVIII  (Cooley's 
ed.,  pp.  267-286);  there  is  also  an  article  on  "The  Dead  Hand"  by 
Rev.  H.  L.  Wayland,  pubhshed  in  the  Journal  of  Social  Science, 
No.  26,  pp.  79-90  (The  American  Social  Science  Association,  Feb- 
ruary, 1890) ;  Washburn  on  Real  Property  (4th  ed.)  Vol.  I,  p.  76, 
Vol.  II,  pp.  385-7,  may  be  mentioned  but  it  gives  very  little  on  the 
subject.  Then  wemaymention  an  American  law  book  on  the  subject 
entitled  Rule  Against  Perpetuities, hy  Professor  John  Chipman  Gray, 
Royal  Professor  of  Law  in  Harvard  University.  Professor  Gray 
says  that  the  rule  against  perpetuities  should  have  been  called 
rule  against  remoteness.  This  is  a  very  valuable  work,  with  refer- 
ences to  American  Constitutions  and  statutes:  but  it  does  not  cover, 
of  course,  the  whole  of  our  field.  Gray's  "  Rule  against  Perpetuities," 
in  the  Harvard  Law  Review  for  January,  1907,  may  also  be 
mentioned. 

2  P.  454.  Blackstone,  Commentaries,  Bk.  II,  Chap.  XVIII,  p.  272. 
*  P.  454.  The  reader  is  referred  to  a  pamphlet  on  "The  Dead 

Hand"  by  the  late  historian,  Henry  Charles  Lea,  published  in  1900, 
for  a  discussion  of  the  acquisition  of  property  by  the  Church  in  all 
coimtries  and  of  the  acts  passed  everywhere  against  willing  or  sell- 
ing property  to  the  Church.  However,  the  land  seems  to  have  been 
accumulated  gradually  and  steadily.  The  following  excerpts  are 
taken  from  the  above-mentioned  work: 

"The  control  which  the  Church  exercises  over  the  hopes  and  fears 
of  the  sinner,  especially  on  the  death-bed,  and  the  teaching,  amply 
warranted  by  Scripture,  that  well-directed  almsgiving  is  the  best 
antidote  for  sin,  has  given  it  in  all  ages  an  unequalled  opportunity 
for  acquisition.  Moreover,  whatever  it  acquired,  it  retained.  It 
held  in  mortmain — in  the  Dead  Hand — and  its  possessions  were 

470 


DEVELOPMENT  OF  PRIVATE  PROPERTY  471 

inalienable.  Pope  Synunachus  declared  that  even  the  pope  could 
not  sell  the  property  of  the  Church.  .  .  . 

"The  exemption  from  public  burdens  claimed  for  Church  lands 
stimulated  their  acquisition,  for  it  enabled  churchmen  to  lay  up 
surplus  revenues  for  fresh  investments,  and  for  these  they  could 
afford  to  pay  more — estimated  at  one-third — than  lay  purchasers, 
as  land  being  untaxable  in  their  hands  brought  them  in  larger  re- 
turns. .  .  . 

"The  Schwabenspiegel,  which  was  in  force  in  the  southern  and 
western  regions,  as  might  be  expected  in  the  land  of  the  great  prince 
bishops,  shows  much  greater  trace  of  clerical  influence.  It  imposes 
no  restrictions  on  mortmain  and  stimulates  liberality  to  the  Church. 
The  result  of  this  was  that  at  the  outbreak  of  the  Reformation  one- 
half  of  the  land  in  Germany  is  estimated  to  have  belonged  to  the 
Church." 

Land  was  given  to  the  Church  for  acts  of  great  piety,  and  against 
these  donations  for  "pious  uses"  much  of  the  legislation  against 
mortmain  is  aimed. 

"This  various  legislation  to  a  common  end  throughout  the  lands 
of  the  Roman  Obedience  is  of  interest  rather  as  showing  the  unani- 
mous conviction  of  European  Statesmen  during  five  or  six  centuries 
as  to  the  evils  of  accumulation  in  mortmain  than  as  exhibiting 
their  power  to  curb  the  acquisitiveness  of  the  Church.  The  con- 
stant iteration  of  legislation  demonstrates  its  ineffectiveness.  By 
one  means  or  another  the  Church  baffled  the  law  givers,  heedless  of 
the  temptations  which  it  was  offering  and  of  the  risk  which  it  might 
run  whenever  circumstances  should  weaken  its  awful  authority 
over  the  minds  of  princes  and  peoples.  It  did  not  anticipate  that 
the  time  would  come  when  those  who  might  shrink  from  spoliation 
would  reconcile  their  consciences  to  the  euphemisms  of  'secularisa- 
tion.' " 

On  October  30,  1781,  Emperor  Joseph  II  suppressed  all  con- 
templative orders  in  his  kingdom,  involving  nearly  two-fifths 
of  all  religious  houses  in  his  dominions,  and  their  possessions 
were  turned  into  a  fund  for  education  and  improvement  of 
benefices.  A  Reichsrezess  of  February  25,  1803,  secularised 
Mayence,  Treves,  Cologne  and  Salzburg  and  eighteen  bishoprics 
with  their  possessions  valued  at  420,000,000  Rhenish  gulden. 
This  Church  territory  had  3,161,776  inhabitants  and  revenues  of 


472    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

21,000,000  florins.  The  money  was  used  for  state  finances,  in  re- 
ligion, education,  and  pensioning  of  clerics,  (pp.  1,  6,  7,  10,  11,  12.) 

*  P.  455.  Bouvier's  Law  Dictionary. 

6  P.  455.  The  Ohio  Statute  is  Section  10,504,  General  Code  of 
Ohio.    This  is  not  an  uncommon  provision. 

e  P.  456.  Blackstone,  op.  cit.,  Bk.  II,  Chap.  XVIII,  pp.  273-4. 

^  P.  458.  We  also  have  the  history  of  educational  institutions  for 
centuries,  and  though  this  history  has  its  dark  periods,  no  other 
chapter  in  human  history  is  so  bright.  Perhaps  some  will  say 
this  is  all  "pro  domo  sua"  and  to  this  no  reply  is  here  attempted. 

8  P.  459.  Nearly  every  State  has  abolished  entailments,  or  has  so 
modified  them  that  they  are  virtually  abohshed.  Pollock  v.  Speidel, 
17  Ohio  St.  439  (1867);  Sutton  v.  Miles,  10  R.  I.  348  (1872);  St. 
John  V.  Dann,  66  Conn.  401  (1895);  Duffy  v.  Jarvis,  84  Fed.  731 
(1898) ;  Clarke  v.  Smith,  49  Md.  106  (1878) ;  Nellis  v.  NeUis,  99  N.  Y. 
505  (1885). 

Our  courts  are  inclined  to  scrutinise  "trusts"  with  great  jealousy, 
and  endeavour  to  scrutinise  strictly  "substitutes  for  entailment". 
But  it  is  hard  to  provide  against  the  ingenuity  of  those  who  desire 
to  perpetuate  the  control  of  vast  wealth  in  one  fine  of  descent. 

*P.  459.  See  on  this  subject  the  brochure  by  Professor  Lujo 
Brentano,  entitled  Familienfideikommisse  und  ihre  Wirkungen.  The 
subject  of  entails  is  discussed  at  considerable  length  by  J.  R.  Mc- 
CuUoch  in  his  Succession  of  Property  in  Chap.  III.  He  argues  in 
their  favour  for  the  nobiUty  in  countries  with  a  legally  recognised 
aristocracy. 

*"  P.  461.  See  list  of  cases  on  Police  Power,  in  Appendix  IV, 
pp.  869-881. 

lip.  461.  For  a  partial  reversal  of  the  Dartmouth  College  Case, 
see  notes  on  Dartmouth  College  Case,  Appendix  IV,  pp.  884-886. 

12 P.  462.  People  v.  O'Brien,  111  N.  Y.  1  (1888). 

"P.  463.  See  The  Wealth  of  Nations,  Bk.  I,  Chap.  X,  Pt.  II, 
where  this  subject  is  briefly  discussed.  Then  also  in  the  same  work 
see  Bk.  V,  Chap.  I,  Pt.  VII,  Art.  2,  where  he  discusses  the  expenses 
of  institutions  for  the  education  of  youth.  In  this  last  part  of  the 
book  the  subject  is  discussed  at  length. 

"  P.  464.  See  article  on  "Fondation,"  Oeuvres  de  Turgol,  Vol.  I, 
pp.  299-309.  Cf.  art.  "Endowments"  in  Palgrave's  Dictionary  of 
Political  Economy,  by  Rev.  L.  R.  Phelps. 


DEVELOPMENT  OF  PRIVATE  PROPERTY  473 

"  P.  465.  See  especially  Hobhouso,  The  Dead  Hand;  also  H.  L. 
Wayland,  "The  Dead  Hand,"  published  in  The  Independent,  and 
reprinted  in  the  Journal  of  Social  Sciences,  No.  XXVI,  February, 
1890.  These  authors  give  numerous  illustrations  not  only  of  the 
absurdity,  but  of  the  bad  consequences  in  many  cases  of  attempting 
to  carry  out  provisions  of  testators  long  ago  dead. 

1^  P.  465.  An  interesting  address  was  delivered  on  Endowments 
by  Sir  Joshua  Fitch,  Inspector  of  Training  Schools  in  England,  be- 
fore the  Association  of  Colleges  of  the  Middle  States  at  the  Univer- 
sity of  Pennsylvania  (1888).  Sir  Joshua  Fitch  said  in  this  address 
that  this  control  which  Parliament  had  assumed  to  exercise  over 
foundations  did  not  decrease  bequests  at  all.  He  had  asked  a  man 
if  he  did  not  feel  less  incUned  than  formerly  to  leave  money  for  edu- 
cational purposes;  but  the  man  had  replied,  No,  that  he  was  glad, 
because  he  knew  that  if  he  made  a  mistake  the  spirit  of  his  bequest 
would  be  carried  out  even  if  the  letter  had  to  be  violated. 

"  P.  465.  Principles  of  Political  Economy,  Bk.  II,  Chap.  II,  §  4. 

1^  P.  466.  It  may  be  found  in  the  printed  Journal  of  the 
Social  Science  Association,  following  the  record  of  the  meeting 
at  which  Dr.  Wayland's  paper  was  read.  No.  26,  already  re- 
ferred to,  and  also  in  the  Works  of  Thomas  Jefferson,  Vol.  VII, 
pp.  310-1. 

"  P.  467.  Gray's  work  on  Rule  Against  Perpetuities;  concerning 
the  provisions  of  the  American  Constitution  and  statutes.  §§  728- 
752. 

2"  P.  468.  The  author  does  not  mean  necessarily  to  approve  the 
earlier  Californian  practice.  He  himself  has  in  a  particular  case 
argued  for  an  exemption  from  taxation  of  property  used  for  educa- 
tional purposes.  He  is  simply  arguing  for  the  possibility  of  social 
control. 

21  P.  469.  Burns's  Annotated  Indiana  Statutes  (revision  of  1908), 
Vol.  II,  §  3998  (3382),  Power  of  AHenation,  40. 

22  P.  469.  This  is  another  chapter  which  requires  a  very  large 
volmne  for  adequate  treatment.  The  author  has  endeavoured  to 
restrict  this  topic  to  its  due  proportions  among  many  other  topics  of 
weight,  so  as  to  bring  this  volume  within  the  desired  limits. 

It  has  been  suggested  that  the  failure  of  the  provisions  of  early 
Constitutions  against  perpetuities  and  monopolies  to  attain  real 
significance  has  not  been  due  to  the  individualism  of  the  courts,  but 


474    PROPERTY  AND  THE  DISTRIBUTION  OF  WEALTH 

to  the  purely  general  character  of  these  provisions.  Doubtless  it 
has  not  been  altogether  easy  to  apply  them,  but  many  general 
phrases  have  received  astounding  developments  by  judicial  decision. 
But  the  courts  have  not  been  peculiar  in  their  attitude.  American 
legislatures  have  not  given  much  attention  to  these  provisions. 


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